text:
    MARIA L. MORGAN, Respondent, v. PHILEMON H. SMITH and ANDREW J. SMITH, Appellants.
    Lease— surety on —right of.\ to off-set damages to tenant — Agreement between lessor and lessee — what operates as discharge of surety — Sealed instrument — Consideration.

    The defendants, sureties upon a lease, in an action for rent set up as a defense, the fact that their principal (the tenant) had been excluded from the use of certain light which he was entitled to. Held, that they were not relieved from liability upon their covenant by reason of the tenant’s being thus damaged; that it was the privilege of the tenant, when sued for the rent, either to set up such loss as a counter-claim, or bring another action therefor; and the sureties could not take advantage of it, unless the tenant was shown to be insolvent.

      Morgan v. Smith (5 Hun, 220) distinguished.
    The lessor having agreed with the tenants to rent the premises for them, and at their risk, and give them the benefit of all rent received, stipulating at the same time that the agreement should not be construed to impair or alter the lease or the security, held, that the sureties were not thereby discharged.

      A. seal is not conclusive evidence of consideration in the sealed instrument, and evidence may be given to show a verbal agreement between the parties not expressed in the instrument.
    Appeal from a judgment in favor of the plaintiff, entered upon a verdict of a jury by direction of the court, in an action against the sureties upon a lease.

      William Allen Butler, for the appellants.

      John A. Godfrey, for the respondent.
   Daniels, J.:

The defendants were sued upon a covenant executed by them, by which they became sureties for the payment of the rent and the performance of the covenants reserved by, and contained in a lease of certain premises, executed and delivered by William H., H. and George H. Smith. The premises were demised and rented as a carpet store, which was so constructed as to derive a portion of its light from, a glass floor light in the floor above it. The tenants of the story over the store, who occupied that under a prior lease from the plaintiff, excluded the light through the floor light, from the store, by placing and keeping over it a covering of carpeting, and by that means the tenants of the store were deprived of the use they were entitled to of it, while they occupied the store under the lease. In consequence of the exclusion of the light the use of the store was reduced in value to the tenants; and it was, accordingly, held, in an action brought by the plaintiff against them for the non-payment of the rent reserved by .the lease, that they were entitled to have the difference in the rental value of the premises, arising from the exclusion of the light, deducted from the amount they would have been otherwise bound to pay; and, upon that ruling, the defendants in this action insisted that the complaint of the plaintiff should be dismissed upon the proof of those facts.

But that result did not follow, for the tenants themselves were liable for the diminished rent as long as they remained in the use and occupation of the demised premises. What it was held they were entitled to, was the right to recoup or counter-claim their damages by reason of the failure of the plaintiff to place them in the possession of the light, they were entitled to enjoy under and by means of the demise; and that was a privilege existing solely in the tenant’s favor, as long as it was neither alleged nor shown that they were insolvent, and whether they even would rely upon and use it by way of defense to the rent claimed from them, or make it the subject of an action in their own behalf, was a matter confided by the law to their election; it was their right and not that of their sureties, and for that reason the latter could not defend themselves by means of it without showing the insolvency of the principals; and then only for the purpose of reducing the plaintiff’s demand. (Coster v. Griswold, 4 Edw. Ch., 364; Lewis v. McMillen, 41 Barb., 420; Gillespie v. Torrance, 25 N. Y., 306, 310, 311; Smith v. Felton, 43 id., 419.)

It was also insisted, in support of the motion to dismiss the complaint, that the plaintiff and the tenants had entered into another agreement before the rent sued for accrued, for the disposition and use of the demised property, which should be attended with the result of discharging them from their obligation as sureties. That consisted of an agreement by the plaintiff with them to rent the premises for them and at their risk, after the first of May, 1813, and give them the benefit of all the rent received ; and it was expressly qualified by the stipulation that it should not be construed “in any manner to impair or alter the lease in its covenants, existing between the parties, in relation to said premises, or to impair or alter the security thereunder, nor in any wise to affect the- relation of landlord and tenant existing between the parties, and the security for the rent and covenants thereunder.” And the tenants agreed to those terms. It is not necessary to decide how far such stipulations may be rendered effectual against persons who are mere sureties and not parties to them; for the agreement made provided no substantial change in the terms of the lease or the obligations of the tenants. They had been only so far restrained by the lease in their power to underlet the premises, as that it should not be done without the permission or consent in writing of the plaintiff. It was fairly to be implied from the terms made use of that, with .that consent, they might relet the premises to other persons, either by their own direct act or through the agency of any other person.employed by them for that purpose; and that would not relieve the sureties from their obligation, because it was one of the events, contemplated by the lease from the plaintiff, and the tenants provided for just that contingency by the agreement they entered into. She consented to the subletting of the premises, and they were placed in her hands for that purpose, by the tenants, substantially, as their agent. That made no such change in the lease as would exonerate the defendants from their liabilities as sureties. The tenants continued to have the benefit of it in one of the modes contemplated by its terms; and while that remained the case the sureties were not discharged from their covenant. For that reason they were not entitled to a dismissal of the complaint.

The defendant Andrew J. Smith testified, as a witness in his own behalf, that he went upon the demised premises with the husband and agent of the plaintiff, before the lease was taken by the tenants, and was informed that they were to have the benefit of the floor light above the store, and that when he was requested by Mr. Morgan, the plaintiff's agent, to become one of their sureties, he told him he would on condition that the light was free over that skylight; that he replied that the covering was there temporarily, and it should be taken off, and upon that he afterward signed the lease. That is the substance of his evidence, though not precisely the terms irsed by the witness. The evidence given by Mr. Morgan was in conflict with this statement, and the court could not assume the fact as proved, and for that reason dismiss the complaint; but if the fact was sufficient to discharge this defendant from the covenant subscribed by him, the evidence relating to it ought to have been submitted to the jury, according to the request made in his behalf. That the tenants did not have the benefit of the light was clearly shown in the ease; and if the evidence given by the defendant Andrew J. Smith, in his own behalf, was true, the only consideration on which he became surety was the agreement that they should have the light; that wholly failed by the omission of the plaintiff to perform on her part.

The instrument subscribed contained the recital that it was executed in consideration of the letting of the premises. But that was not conclusive against either of the defendants, although it was under seal. Formerly their seals would have concluded them, but now, by statute, in an action founded upon a sealed instrument, the seal is only presumptive evidence of a consideration ; and that may be rebutted by showing that none in fact existed, in the same manner and to the same extent as though no seal had been affixed. (3 R. S. [5th ed.], 691, § 109; Tallmadge v. Wallis, 25 Wend., 107.) And that defense was relied upon in the defendants’ answer. The evidence of the witness was sufficient to establish it in his favor if it should be credited by the jury. In an action upon a simple contract it would clearly have been good. (Bookstaver v. Glenny, 3 Sup. Ct. [T. & C.], 248.) And by the terms of the statute the effect must now be the same upon an instrument under seal. If this defendant became a surety on that consideration he was relieved from liability by the failure of the plaintiff to perform the agreement made on her part by her agent. Whether he did, or not, was a fact which should, under the evidence, have been submitted to the jury. No such defense was shown in favor of the other defendant, and for that reason the verdict was properly directed, so far as it was against him. The judgment should therefore be affirmed as to him and reversed as to the defendant Andrew J. Smith, with costs to abide the event.

Davis, P. J., and Brady, J., concurred.

Judgment affirmed as to Philemon IT. Smith, and reversed as to Andrew J. Smith and new trial as to him ordered, costs to abide event.

      5 Hun, 220. —[Bep.


source: Caselaw Access Project

author: Daniels, J.:

license: Public Domain

text:
    THE PEOPLE, Etc., ex rel. JAMES H. PINCKNEY and THE RELIEF FIRE INSURANCE COMPANY OF THE CITY OF NEW YORK, Appellants, v. THE NEW YORK BOARD OF FIRE UNDERWRITERS, Respondent.

      Corporate body — .member of, when may be expelled.

    Where a corporation is formed for the purpose of establishing uniformity in .the insurance policies and contracts of its members, it is a tacit condition of membership, that a member will not oppose or injure the interests of the corporate body; and, if he breaks this condition — e. g. by insuring for smaller -.amounts than those established by the corporation — he may be expelled, on ¡trial and conviction by the corporation.
    Appeal by the relators from an order made at Special Terra, ■denying a motion for a mandamus compelling the defendants to ¡restore the relators to membership in their board.

      John E. Parsons, for the appellants.
    The power to make bylaws must be .exercised reasonably, with sound discretion, and strictly within the limits of the charter, and in perfect subordination to the Constitution and the rights dependent thereon. (2 Kent’s Com., 296; Ang. & Ames, § 347 and eases; Commonwealth v. St. Patrick?s Society, 2 Binn., 441; The People ex rel. Thatcher v. New York Com. Ass., 18 Abb., 271; Ang. on Corp., §§ 349, 350; 2 Kent, 297, 299; see Grant on Cor., 264; People ex rel. Gray v. The Medical Society of Erie, 24 Barb., 571; Ang. & Ames, 268; 2 Kent, 296; Grant on Cor., 76.) Disfranchisement is defined to be the taking a franchise from a man for some reasonable cause. (Grant on Cor., 263.) A regulation must be : 1. Authorized. 2. Reasonable. 3. In accordance with public policy and the law. The power of making by-laws must be exercised with discretion, hence by-laws must be reasonable. (Gosling v. Yeley, 12 Q. B., 347.) The defendants are not a mere voluntary company, or a benevolent or religious society of the kind with which disfranchisement is possible, and there was no right of expulsion by the action of the corporation at all. (Ang. & Ames, § 362 and cases cited; id., §419; 2 Kent, 298.) A rule or regulation preventing competition in rates is illegal, as being in restraint of trade, and having for its object to prevent competition. This is a matter that concerns public policy. (Hooker v. Yandewater, 4 Denio, 349; Stanton v. Allen, 5 id., 434.)

      William Allen Butler, for the respondents.
    A regulation may be good as an agreement, though bad as a by-law. (See Angel, § 342, and Ames on Cor., 9th ed.; Davis v. Proprietors of Meeting House, 8 Met., 321; Addy v. Whistable Co., 17 Ves., 323.) It is always cause for the amotion of a corporator if he violates his duty to the society as a member of the corporation. {The King v. The Mayor of Liverpool, 2 Burr., 732, cited in People v. Medical Society of Erie, 32 N. Y., 194.) And the question is always whether the violation is against a regulation within the scope of the corporate powers of the company. (See People v. N. Y. Com. Ass., 18 Abb., 271.)
   Daniels, J.:

The relator James H. Pinckney, as president of the Relief Fire Insurance Company, was an incorporator in the corporation named the New York Board of Fire Underwriters, incorporated by chapter 846 of the Laws of 1867. Its purposes were declared to be “ to inculcate just and equitable principles in the business of insurance ; to establish and maintain uniformity among its members in policies or contracts of insurance, and acquire, preserve and disseminate valuable information relative to the business in which they are engaged.” (Yol. 2, Laws of 1867, § 2.) And power was conferred upon it “ to make all needful by-laws not contrary to the provisions of the act, or the Constitution and laws of this State or of the United States.” (Id., § 6.) A by-law was adopted providing that the board might establish or alter rates of premiums for insurance by a majority of its members at any regular meeting, or one especially called for that purpose, and that such rates should be binding on all the members. The Relief Fire Insurance Company subscribed the charter and by-laws, and agreed to be governed by, and to maintain all the rates, rules and regulations adopted by the board. The board adopted and prescribed rates which should be charged and received by its members as premiums for insurance upon property. And the relators afterwards violated those rates by insuring two steamers for smaller amounts than those which had been established by the board. For that, after an investigation of the charge, the Relief Fire Insurance Company was expelled from its membership in the board.

The defendant owned no other property than that allowed to be acquired for the purposes of its incorporation ; and that amounted to the sum of about $50,000. It issued no stock, but was empowered to assess upon the organizations and agencies of which its membership consisted, not 'to exceed two per centum of the aggregate premiums returned by them as received, such sums as should be necessary to defray its expenses, and to sustain a fire patrol, if that should be provided. It was also permitted to take and hold real and personal property, to an amount not exceeding $100,000, for the purposes of the corporation ; and they were regulating and managing the business of insurance carried on by such organizations and agencies. The members owned none of the property acquired, and no earnings were to be made in which they could in any form participate. But the assessments collected were designed to pay the expenses to which the corporation should be subjected in the conduct and management of its affairs, and the acquisition of real and personal property required for such purposes. It was in no sense whatever a trading corporation ; and no part of the assessments paid or collected was afterward to be returned to the organizations or agencies from which they should be received. For those reasons it was not a corporation from which its members could not be expelled, because they were entitled to proprietary interests in its capital or earnings. There wei’e no such interests belonging to any of its- members, and their membership could not be absolutely maintained on account of them. It was merely an organization formed for promoting the proper transaction and management of the business of insurance, by its members, in a uniform manner. And its usefulness and success depended, in a very great measure, upon their faithful observance of its rules and regulations. That, under the charter, was an implied condition of membership, for the organization could be no otherwise maintained. And, for that reason, the corporation necessarily possessed the power of expulsion over members violating their obligations in that respect. It could not exist without it. If they could violate the rules and by-laws lawfully made by it, and still insist upon their membership, the object for which the corporation was formed would be at once defeated. For it could not, under such a state of affairs, establish any thing like uniformity in the business of its members. It has been said to be a tacit condition, annexed to the franchise of a member, that he will not oppose or injure the interests of the corporate body, and, “ consequently, if he breaks this condition he may be disfranchised.” (Ang. & Ames on Cor. [4th ed.], § 411; Com. v. St. Patrick's Society, 2 Binn., 448.) In that case it was held that when the offense of a member is against his duty as a corporator, he may be expelled on trial and conviction by the corporation. (Rex v. Liverpool, 2 Burr., 723.) And none could very well be more so, than a practical nullification of the lawful by-laws of a corporation by a refusal to observe them. If that should be tolerated, the object to be secured by the incorporation must necessarily. in the end, be subverted.

One of the,leading purposes expected to be accomplished by the existence of the defendant was uniformity in the insurance poli cies or contracts of its members, not in some particulars merely, but in all substantial respects. They could not otherwise, in any just or proper sense, be uniform. And, as the amount of premiums to be charged was an important feature of both the business and the policy, uniformity could only be secured by declaring their rates. The provision contained in the statute is without exception, in this respect. Whatever was necessary to secure uniformity could be established by the defendant, under the power which was given to it over the business of its members. Contracts of insurance at different rates upon the same description of property would not be uniform. The policies would not be alike, even though the risks assumed by them were the same. And their existence would not be consistent with the uniformity the defendant was authorized to require in the contracts of its members. That was designed to be complete in all substantial respects, and it could only be made so by the contracts being entered into for the same consideration where the risks were precisely alike.

The by-laws were adopted to secure that end, and they were reasonable for that purpose. They were lawfully enacted, because they were necessary for the promotion of the success of the organization. And they contained nothing which was in conflict with the charter, or the laws or Constitution of the State or the United States. And those were the only restraints imposed upon their enactment.

The proceeding taken for the expulsion of the relators was not complained of for want of notice of the hearing to them, but it was assailed for want of power, under the act of incorporation, to expel the relator company from membership for the cause alleged against it, or any other cause of which it had been guilty. And that objection, as it has been already shown, cannot be maintained. The fact that both the relators were heard upon the complaint made, charging the violation of the by-law, appears by the defendant’s proof. For, in the affidavit produced to oppose the motion, it was stated that the said company, of which the other relator was president, insisted and claimed that it had the right to insure vessels at the rate at which it had insured them. This shows its presence at the hearing by the intervention of its officers, and the objection was in the nature of a demurrer to the sufficiency of the charge made. And, as the facts were ascertained to be true, the result of expulsion legally followed. After appearing and making the objection taken, the want of .notice could not be made the subject of complaint against the proceedings, even if none had been given. (Ang. & Ames on Cor. [3d ed.], §421.) The only object of notice is to afford the party proceeded against the opportunity of’ making a defense, and that, it is evident from the proceedings, was secured in this instance.

The relators are entitled to no change in the order appealed from, and it should, therefore, be affirmed, with the usual costs.

Davis, P. J., and Brady, J., concurred.

Order affirmed, with costs.


text:
    THE REAL ESTATE TRUST COMPANY, Respondent, v. THOMAS KEECH, Appellant.

      Mortgage — effect of payment of torvas, to secure extension of time of payment.

    The defendant paid to the plaintiff $1,000, in addition to the lawful interest, to procure an extension of time within which to pay a debt secured by a mortgage held by the plaintiff. Retd, in an action to foreclose the mortgage, that the security given for the original debt was not impaired by such payment, but the amount so paid should be applied as a payment on the mortgage debt.
    Appeal from judgment of the Special Term in favor of the plaintiff, in an action for the foreclosure of a mortgage.

      William A. Boyd, for the appellant.

      Henry H. Davies and Julian T. Davies, for the respondent.
   Daniels, J.:

The mortgage foreclosed was executed by the defendant on or about the 31st day of May, 1871, to secure the payment of his bond, dated at the same time, and delivered to John G. Congdon, conditioned for the payment of $19,000, with lawful interest from the 1st of June, 1871, on the first of the following November. On the 6th of January, 1872, Congdon assigned the bond and mortgage and debt secured to the plaintiff. About the 18th day of November, 1872, an agreement was entered into between the defendant and the president of the plaintiff, acting in its behalf, by which it was agreed, in consideration of the sum of $1,000, that the payment of the debt should be extended for the period of six months. In pursuance of that agreement the defendant paid the sum of $1,000 to the plaintiff’s president, and was allowed the extension of the credit agreed upon. The defendant claimed upon the trial, and upon the argument of the appeal, that this agreement, being usurious, rendered the securities taken-for the original debt void. But as that was a valid debt, it was not affected by the usurious agreement made for the mere extension of the time for its payment. The usury simply avoided the agreement for its forbearance. It rendered that invalid without annulling the original debt, or the securities given for their payment. There is nothing in the case of The Dry Dock Bank v. The Am. Life Ins. and Trust Co. (3 Com., 344) supplying the least support to that position taken on behalf of the defendant. And the cases of Bush v. Livingston (2 Cai. Cas., 66); Williams v. Allen (7 Cow., 316); Carson v. Ingalls (33 Barb., 657); Lesley v. Johnson (41 id., 359); Williams v. Fitzhugh (44 Barb., 322); Crippen v. Heermance (9 Paige, 211); The Winsted Bank v. Webb (39 N. Y., 325), are directly opposed to it.

The only effect of the agreement made, and the payment of the $1,000 as its consideration, was to create an equitable right in favor of the defendant to have the amount applied as a payment on the mortgage debt. (Crane v. Hubbel, 7 Pai., 413, 417 ; Judd v. Leaver, 8 id., 548.) The agreement being void, equity intervened, and applied the usurious bonus upon the debt as a payment. And upon the facts alleged and proved, such an application should have been, made of it in this case. The right to it is not dependent upon the statutory provision, which allows the recovery by the debtor of usurious premiums paid by him, provided they be sued for within one year. Accordingly, it is.not within the case of Palen v. Johnson (50 N. Y., 49), relied upon by the plaintiff’s counsel. It arises out of the equities of the transaction, which justly apply the money received by the creditor, as the consideration of a usurious agreement for the extension of the credit, in part payment of the debt. The agreement being void, no other disposition can equitably be made of the money paid by the debtor under it. The facts alleged in .the answer and proved upon the trial, and found by the court, entitled the defendant to that application of the money. And, as the law upon that subject has been reasonably well settled, it is the duty of this court, in its administration, to make that disposition of the case. But, as the point was not insisted upon by the counsel for the defendant, he should not, for that reason, be relieved from the costs of the appeal. The judgment should be reduced in its amount by deducting the $1,000, and interest upon it, from its amount; and, as so modified, it should be affirmed with costs to the respondent.

Davis, P. J., and Beady, J., concurred.

Judgment modified by deducting $1,000 and interest; affirmed as modified.


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

text:
    WILLIAM H. BOOTH and others, Infants, by Guardian, Appellants, v. WILLIAM K. KITCHEN and JAMES L. WORTH, Executors, etc., of OTIS DYER, Deceased, and others, Respondents.

      Will — jurisdiction of Supreme Court, to sustain action to establish claim to legacies revoked by subsequent codicil.

    The Supreme Court has no jurisdiction to entertain an action brought to establish the claims of legatees named in the first codicil of a will, and to set aside the probate of a subsequent codicil by which such legacies are revoked.
    The Surrogate’s Court has exclusive jurisdiction of the probate of wills of personal property, and, although by the revocation of the first codicil the legatees named therein are left mere strangers to the will, and are not entitled . to be cited to attend its probate, yet the Supreme Court is not at liberty, as a court of equity, to take jurisdiction in defiance of the statute.
    Appeal from an order of the Special .Term, sustaining the demurrer to plaintiff’s complaint in an action to establish certain legacies, and set aside the probate of a codicil to a will.

      By a codicil to a will of real and personal property, the testator provided for the payment of certain legacies to the appellants. By a subsequent codicil these legacies were revoked.
    The appellants were not next-of-kin to the testator, and were not cited to appear on the probate of the will.
    This action was brought by the appellants to set aside the probate of the second codicil, on the ground that it was executed under undue influence and fraud. The defendants demurred to the complaint, on the grounds that it did not state facts sufficient to constitute a cause of action, and that the court had no jurisdiction.
    The demurrer was sustained.

      Aaron Pennington Whitehead, for the appellants.
    This court has jurisdiction under the statute of 1853 (chap. 238, p. 526). Aside from the statute, this court would have jurisdiction on equitable principles; {Cutler v. Wright, 22 N. Y., 472 ; Walsh v. Ryan, 1 Bradf., 433; Terhune v. Brookfield, 1 Redfi, 220; Re Lucius Chittenden, 1 Tuck., 135 ; Kipping c& Barlow v. Ash, 1 Robt. [Eccl.], 270.) These legatees were not required to be cited, and were not represented at the probate of the later codicil destroying their interest. Their right is clear. They have no remedy at law. Equity will certainly relieve them on well settled principles. (1 Story’s Eq. Jur., § 32.) The defective legislation is only in the instance and not in the principle. {Pasley v. Freeman, 3 T. R., 63; see, also, 7 Taunt., 515, Parke, J.; Fetcher v. Lord Londes, 2 Bing., 550; 1 Story’s Eq. Jur., p. 116, § 53; 2 Phillimore, 224.) These infants have no remedy, unless in equity. They have exhausted their means of redress in the Surrogate’s Court, and without success. In the English courts of equity a bill like the present has been entertained, where the probate was obtained by fraud. (Welly v. Thoragh, Pre. Ch., 123 ; Barnesly v. Powel, 1 Yes. Sen., 28; Clasoote v. Lang, 8 Sim., 358; 3 Myl. & Craig, 451; Jarvis v. Chandler, Turn. & Russ., 319 ; Idley v. Bowen, 11 Wend., 237; Bowen v.-Ldley, 6 Paige, 46 ; Tarver v. Tarver, 9 Pet., 180.) Another reason for the interposition of this court is that the parties who are thus left without remedy are infants. (Lord IIardwioke, in Butler v. Freeman,
      Ambler, 302; Paige, J., in Lefevre v. Laraway, 22 Barb., 175 ; Rogers y. Cruger, 7 Johns., 581, 613.)

      Francis C. Barlow, for the respondents.
    This court has nO' jurisdiction of an action to revoke the probate of a will of personal property. (See Vcmderpoel v. Van Valkenburgh, 6 N. Y., 190, and. the cases cited by counsel at 196; see, also, Hyer v. Burger, 1 Hoff. Ch., 10, 11, where the chancellor-fully discusses the question, and dismisses the bill; Colton v. Ross, 2 Paige, 396, 398, 399 ; Muir y. Trustees, etc., 3 Barb. Ch., 477, 481; Bogarclus v. ClarkT 1 Edw. Ch., 266 ; Campbell v. Logan, 2 Brad. Sur., 92; Allen v. McPherson, 1 H. L. C., 191.) The supposed “ equity ” which, it is claimed, gives this court, as a court of equity, jurisdiction, is-asserted to arise out of an omission of the legislature. The law considers that the executor represents creditors and legatees. (See Wiser v. Blachly, 1 Johns. Ch., 438, at middle of page, and opinion of Davis, J., hereto annexed.) The complaint does not show that the plaintiffs have any rights in real property which are disturbed by the second codicil. They must show in themselves an interest-in real property affected by the second codicil. It is not enough that the second codicil may affect an interest of the' plaintiffs in real property. It should be averred that it does. The legacies themselves are revoked by this codicil. This is a disposition of personal property, and the decree of the surrogate is conclusive
   Daniels, J.:

The object of this action was to sustain the right of the plaintiffs to legacies in trust, provided for them by a codicil to the will of Otis Dyer, deceased. The will, together with a second codicil, which, in terms, revoked the bequests in the plaintiffs’ favor, were admitted- to probate; the other was rejected, because of its final revocation by the last codicil. That such an action cannot be sustained in this court for the purpose of establishing the first codicil in which the legacies were provided for, and annulling the probate of the codicil afterwards executed, appeal’s to be quite well settled by the authorities. (Muir v. Trustees, etc., 3 Barb. Ch., 477; Vanderpoel v. Van Valkenburgh, 2 Seld., 190; Colton v. Ross, 2 Paige, 396.) And the jurisdiction created by the statute of 1853 is not broad enough to include it. For that has been, in terms, confined to a will of real estate, or a devise of that description of property. (3 Kev. Stat. [5th ed.], 141, §§ 18, 19.) It is not sufficient to make a ease within these provisions that the will may devise real estate, when the controversy is in fact limited, as it is in this instance, to the disposition of the personal estate only. For these reasons, and those assigned in the opinion delivered by Presiding Justice Davis on the denial of the motion to continue the injunction, the order appealed from should be affirmed, with costs.

The following is the opinion of Judge Davis delivered at Special Term, and referred to in the opinion of Daniels, J.

Davis, P. J.:

It seems singular that no case has arisen upon conflicting codicils in wills of personal property, presenting the exact questions raised in this case, and determining whether or not the Court of Chancery may take jurisdiction to try the validity of a second codicil which revokes a former codicil, and takes the legacies therein bequeathed away from the persons designated in the revoked codicil.

The Surrogate’s Court had undoubted jurisdiction to try and determine the validity of the second codicil. That it has done, and upon such trial has admitted it to probate on the citation of all persons required to be cited by the statute. The present plaintiffs were not next of kin nor heirs at law of the testator. They would have been, if the first codicil had not been revoked by the second, mere recipients of the testator’s bounty; but the revocation of the bounty once intended for them, and its disposition to the parties named in the second codicil, have left them mere strangers to the will. This is the effect of the statutes and of the judgment of the Surrogate’s Court. Put it is claimed that as the plaintiffs were interested in maintaining the first codicil by overthrowing the second, and have had no hearing and no day in court, on that question, there is a clear casus omissus in the statute, which a court of equity has jurisdiction to remedy. Forcible as this argument seems to be, it nevertheless addresses itself rather to the legislature than to a court of equity, because if the statutes have declared the probate of a will or codicil under these circumstances conclusive upon all other courts, a court of equity is not at liberty, upon the ground of wounded conscience, to take jurisdiction in defiance of the statute.

The authorities seem to hold, with uniformity and clearness, that this court has no jurisdiction, under any circumstances, of an action to revoke the probate of a will of personal property. (Vanderpoel v. Van Valkenburgh, 6 N. Y., 190; Heyer v. Burger, 1 Hoff. Ch., 1; Colton v. Ross, 2 Paige, 396; Muir v. Trustees, etc., 3 Barb. Ch., 477; Bogardus v. Clarke, 1 Edw. Ch., 266; 4 Paige, 623; 7 id., 397; and see other cases cited by counsel and by the court in Vanderpoel v. Van Valkenburgh.)

'The proposition of the plaintiffs is, that this court has jurisdiction to entertain plaintiffs’ action to defeat the second codicil, because the Surrogate’s Court was not bound by law to entertain jurisdiction of their allegations that it was procured by fraud and undue influence. The question of the validity of the codicil necessarily involved the question of fraud and undue influence, and the surrogate, either directly or by necessary implication, passed upon them in adjudging such validity. The executors, in presenting the will for probate, were the representatives of all parties who were not by law entitled to citation. They affirmed, and were bound to maintain the validity of all parts of the will which purported to divert any portion of the estate from the legal channels into which it must have fallen if the deceased had died intestate. I am much inclined to think that if plaintiffs had appeared in the Surrogate’s Court, and prayed leave to contest the second codicil and establish the first they ought not to have been prevented from doing so, and that the court would have been justified in holding, on appeal, that the Surrogate’s Court was competent to entertain such a controversy notwithstanding it was not required to cite the plaintiffs to attend the probate. This is upon the ground that that court is the tribunal clothed with exclusive jurisdiction of the probate of wills of personal estate, and is therefore the “ competent tribunal” who may declare such wills void, subject of course, to the appellate review given to other courts. (See Campbell v. Logan, 2 Bradford, 90; and see Allen v. McPherson, 1 H. of L. Cases, 191.)

In a case of so much doubt, I do not deem it proper that this court should allow its writ of injunction to restrain the action of the executors under the surrogate’s decree. The plaintiffs have delayed till the eve of the expiration of the year within which executors are prohibited by law from proceeding to pay legacies, and they now invoke this tribunal to further resf¿raiu them by injunction. They should, under such circumstances, show a case of reasonably clear if not undoubted right to that process.

The complaint does not bring all the necessary parties before the court. Its allegations on the subject of fraud and undue influence, and of the persons by whom the same are supposed to have been exercised, are extremely vague and indefinite. These facts also add force to the objections that a plain and clear right to the writ is not shown. I think it my duty, therefore, to deny the motion to continue the injunction, and to dissolve the injunction heretofore issued, with ten dollars costs of the motion to defendants.

Davis, P. J., and Brady, J., concurred in opinion of Daniels, J.

Order affirmed, with costs.


text:
    WILLIAM H. BOOTH and others, by Guardian, Appellants, v. WILLIAM K. KITCHEN and JAMES L. WORTH, Executors, etc., of OTIS DYER, Deceased, and others, Respondents.

      Will and codicils — legatees wndeo' revolted codicil — right of, when not next of kin, to contestprobate of — 3 B. 8. (5th ed.), 142, §§ 23, 24.
    The statute allowing tlie next of kin to contest the validity of a will of personal property within one year after its probate (3 R. S. [5th ed.], 142, § 24), does not extend to persons claiming to be legatees who are not, at the same time, next of kin, but the surrogate has power to relieve parties from the controlling effect of the probate under the section 23 of the statute which provides that after its probate, a will “may be declared void by a competent tribunal.”
    'Jnder the section (3 R. S. [5th ed.], 326, § 1, sub. 4) which gives the surrogate power to enforce the payment of debts and legacies, and also under the section (3 R. S. [5th ed.], 140, § 49) which declares that the executor * * * or any person interested in tlie estate may have such will proved before the proper surrogate, a person claiming to he a legatee under a codicil afterward revoked is entitled to a hearing.
    Appeal from an order of the surrogate, denying an application of infants for leave to contest the validity of a second codicil to the will of a testator, who, in a prior codicil had given to such infants legacies which were revoked by such second codicil, the infants not being next of kin of the deceased.

      Anson Blake Jackson and Aaron Pennington Whitehead, for the appellants.
    Immediately upon the probate of the will and first codicil the infants, appellants, had such an interest as should have entitled them to a hearing in opposition to the probate of the alleged second codicil. ( Walsh v. Ryan, 1 Bradf., 433; Terlume v. Brook-field, 1 Bedf., 220; Re .Lucius Chittenden, 1 Tuck., 135; Kipping & Barlow v. Ash, 1 Bobt. [Eccl.], 270.) The application came within the spirit of the Bevised Statutes. (Chap. 6, title 1, art. 2 [2 B. S., Edmonds’ ed., p. 61].) These statutes are highly remedial, and should be liberally construed. (Potter’s Dwarris on Stat., 73, 231, 233, 234; Broome’s Legal Maxims, 83; Co. Lit. 246 ; Jenk. Cent., 58-60, 226; per Ashurst, J., Pasley v. Freeman, 3 T. B., 63; per Parke, J., 7 Taunton, 515 [2 E. C. L. B.] ; Fletcher v. Lord Londes, 2 Bing., 550 [11 E. O. L. B.].) Aside from this statute, the surrogate had ample power to open the probate of this second codicil and grant a rehearing on the application of the petitioners. (Campbell v. Logan, 2 Bradf., 90, etc.; Pew v. Hastings, 1 Barb. Ch., 452; Proctor v. Wanmaker, 1 Barb. Ch., 302, and cases there cited; Harrison v. McMahon, 1 Bradf. 290; JDohke v. McClaren, 41 Barb., 491; Brick’s Estate, 15 Abb. Pr., 12; Sippsrly v. Bauerus, 24 N. Y., 46.) No laches can be imputed to the petitioners in their application to the surrogate. (Rogers v. Cruger, 7 Johns., 581, 613; Paige, J., in Lefevre v. Laraway, 22 Barb., 175.) There was a presumption of undue influence strong enough to make it the duty of the surrogate to grant the petition for a rehearing. (Hewhouse v. Godwin, 17 Barb., 236; Leacraft y. Simmms, 3 Bradf., 39; Barley v. Barley, 3 id., 481; Wilson v. Moran, 3 id., 180; 1 Swinbnrn on Wills, 191; Marsh v. Tyrrell & Harding, 2 Hagg. Eccl., 87; Billinghurst v. Vickers, 1 Phil., 199; Ingrain v. Wyatt, 1 Iiagg., 449; Miohell v. Thomas, 12 Jur., 967.) The surrogate’s order denying the petition is subject to review in this court. (McMahon v. Harrison, 6 N. Y., 447; JDelaplaine v. Lawrence, 3 id., 302.)

      Francis O. Barlow, for the executors, respondents.
    The surrogate did not place his denial on the want of power. The surrogate having denied the motion generally, must be presumed to have done it on the merits. The rule when motions are made for new trials on the ground of newly discovered evidence should prevail here. (See cases cited in Abbott’s Digest, new edition, vol. 4, p. 525, §§ 405, 406, 407, 408 and 409; and see, also, Adams v. Bush, 2 Abb. [N. S.], 102; Quinn v. Lloyd, 1 Sweeney, 253; JDenn v. Morrell, 1 Hall, 382.) There is no legal right in these infants to be heard, and as to equities, there are none, without an explanation of the long delay, and a much greater suggestion of in jury to these legatees than their mere allegation of incapacity and undue influence.

      B. C. Chetwood, for the infant respondents.
   Daniels, J.:

The surrogate of the county of New York took proof of, and admitted the will and second codicil of the testator to probate.

By that codicil, a bequest in trust for the appellants, contained in the first codicil, was revoked, and they were deprived of the interest which it gave them in the testator’s estate. They were infants and not cited, and did not, in fact, appear on the hearing before the surrogate, and, accordingly, had no opportunity whatever of contesting the validity of the second codicil. That, with the will, was admitted to probate on the 2d of December, 1874; and, in November, 1875, an application was made by their guardian, on their behalf and in their name, to the surrogate for leave to contest the validity of the second codicil, on the ground that -the testator was not of sound mind when it was made, and because it had been obtained by coercion, imposition and undue influence. That was resisted by the executors and the other persons interested in the estate under the will and second codicil, and, on the nineteenth of November, it was denied. From the order denying it the infants, by their guardian, appealed.

• Upon what ground the application was denied by the surrogate does not appear. But it probably was for the reason that they were not next of kin of the testator, and, therefore, not within the provisions of the statute allowing the validity of a will of personal estate to be contested within one year after its admission to probate. It is chiefly under the provision contained in this section of the statute that the propriety of the order made has been questioned on this appeal, and if the application could be supported by no other authority, it would be exceedingly difficult to render it successful, for this section relates, in terms, only to proceedings which may be taken in favor of the next of kin of the testator. (3 R. S. [5th ed.], 142, § 24.) The phrase used is one of well known legal signification, and there is nothing in the statute from which it can be inferred that it was intended to have any other than its appropriate meaning; and, for that reason, it should not be so far extended, by construction, as to include persons claiming to be legatees who are not at the same time next of kin of the testator. The surrogate was probably right in holding that the applicants were not entitled to the hearing under it, which was applied for in their behalf. But the power of the surrogate to relieve parties not heard from the controlling effect of the probate of a will of personal estate is not wholly contained within that section of the statute. The immediately preceding section, prescribing the effect of probate in such a case as that, has not rendered it entirely absolute. But it makes it conclusive, subject to certain future contingencies, and among them is that providing that the will may, nevertheless, be declared void by a competent tribunal. (3 R. S. [5th ed.], 142, § 23.) Under this section it may, after its probate, be declared void by a competent tribunal. The statute has not designated the tribunals which shall possess that authority over the probate. But, from the fact that the surrogate has been, in general terms, empowered to take proof of wills of real and personal estate in the cases prescribed by law (3 R. S. [5th ed.], 362, § 1, sub. 1), which includes the will of any person who, immediately preceding his death, was an inhabitant of the same county as the surrogate,, (id., § 2), it would seem to follow that his court was intended to-be a tribunal of the description referred to in the statute In that class of cases the power of the surrogate to take the proof is entirely complete and unrestrained, and must, therefore, include an instrument of the description of that under which the applicants claimed their legacies; that was, substantially, a will in their favor, although, in terms, known only as a codicil; it was part of the testator’s will, and, if not annulled by the second codicil, has remained so, and under its provisions they may still secure such legacies. Whether it was revoked must depend, as the formal requisites seem to have been observed in its execution, upon the testamentary capacity of the testator at the time of the execution of the last codicil, and his freedom from imposition, control and undue influence. That can only appear by proof, and such proof properly constitutes a portion of the entire proof of the will, and the applicants alone are interested in making it for the protection of their claims to these legacies, and have yet had no opportunity to produce it. The complete jurisdiction given to the surrogate over the proof of wills must render his court a competent tribunal, and, perhaps, the only tribunal which can declare void the probate of a will of personal estate; and, in such a case as this, justice can only be completely done by hearing the applicants for the protection of their rights.

The jurisdiction also seems to be properly maintained under the provision of the statute giving the surrogate power to enforce the payment of debts and legacies (3 R. S. [5th ed.], 326, § 1, sub. 4); that authority is unrestrained, and must include the right to hear the proofs which can be produced by legatees to establish their claims to legacies, and, as incidental to that, the question whether a codicil divesting the right of the legatees to legacies previously given must necessarily be included. The power to enforce payment can be fully and properly.exercised in no other way.

It may also be very clearly derived from the provision of the .statute which declares that “ the executor, devisee or legatee named in any last will, or any person interested in the estate, may •have such will proved before the proper surrogate.” (3 R. S. [5th [ed.], 146, § 49.) Under this section, the legatee may insist, upon his own behalf, on the proof of the will; and, for the purpose of ..establishing his right, may produce whatever evidence shall be in liis power to maintain his title to a legacy given him by any part of the testator’s will. The right to the hearing is positive in its nature, and cannot properly be denied when it may be lawfully applied for. These legatees had the right to insist that the first codicil remained a part of the testator’s will, notwithstanding the existence of the second one, and propound it for probate; and to sustain themselves in that position by any proof which would show that the last codicil was, for any reason, inoperative. In no other way can the full benefit of this provision of the statute be secured to them.

It is not the policy of the laws to deprive parties of their proprietary rights and interests without affording them an opportunity to be first heard, and the requirement cannot be justly satisfied by a formal hearing in their behalf by other parties whose interests may be best subserved by the failure' of the claim made. No such hearing upon the validity of this codicil has been had as the interests of the applicants require, and it could not properly be had without their presence, as parties to the proceeding, with the privilege of producing evidence to maintain their claims.

The provision of the statute declaring the effect of the probate of a will of personal estate would be entirely unreasonable, and, probably, unconstitutional, without the right to such a hearing, before the surrogate, of parties against whom it should be held conclusive, for it would be attended with the result of depriving persons of their property without due process of law. This right to be heard by parties intended to be concluded by the probate has been maintained by authority. In Bogardus v. Clark (4 Paige, 623), it was held that the probate “ is in the nature of a proceeding in rem, to which any person having an interest may make himself a party by applying to the proper tribunal before which such proceeding is had, and who will, therefore, be bound by the sentence or decree of such tribunal, although he is not, in fact, a party.” (Id., 626.) And that was approved and sustained by the Court of Appeals in the case of Vanderpoel v. Van Valkenburgh (2 Seld., 190, 199).

The authority of the surrogate of the county of New York has been rendered still more complete in this respect, if that could, in any view, be regarded as essential, by the recent statutory provision giving him the same power to set aside, open, vacate or modify the orders or decrees of his court,’ as is exercised by courts of record of general jurisdiction” (Laws of 1870, vol. 1, 826, § 1), and that is as broad as the nature of any case may require for the promotion of the ends of justice. The form in which the application was made on behalf of these infants was sufficient to entitle them to the benefit of all the statutory provisions which have been mentioned; and it was made with reasonable diligence, particularly as infants are not properly chargeable with the consequences of delay in legal proceedings. It may, very likely, turn out that they can, in the end, derive no benefit from a further hearing of the case, but that is no reason why it should bo denied them. The interests of all parties will be best subserved by having this controversy heard and decided as soon as it may be practicable. If the claim made on behalf of the applicants is a valid one, they will be better able to maintain it now while the evidence may be accessible by which that can be shown, and, if it is not, that should be ascertained in order that a final distribution under the will may safely and finally be made. That can be done in no other way, for, if the applicants are right in their claims, they cannot be divested of their interests without first being heard in support of them. There can be no substantial ground for doubting the power of the surrogate to hear and finally decide this controversy. For that reason, the order, so far as it has been appealed from, should be reversed, and the proceedings remitted to the Surrogate’s Court, with directions to enter an order for the hearing of the applicants, and the parties should recover their costs out of the estate in the hands of the executors.

Brady, J., concurred in the result; Davis, P. J., taking no part.

Order reversed; proceedings remitted to Surrogate’s Court, with directions to enter an order for the hearing of the applicants, and the parties to recover their costs out of the estate in the hands of executors.


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    JOHN S. KLINE and CLINTON McCLARTY, Receivers, etc., Appellants, v. THE QUEEN INSURANCE COMPANY, Respondent.

      Insurance — Agency — Sufficient interest in property, to insure in agent’s name — what is.

      A general agent, having the care, management, sale and control of his principal’s property, with power to preserve and dispose of it, and liable to account to his principal for it or its proceeds, has a sufficient interest in the property to entitle him to effect insurance on it in his own name, the merchandise being described in the policy as “ their own, or held by them in trust or on commission, or sold but not delivered.”
    Whether such custody created a trust such as to render it a proper subject of insurance under a policy delivered to the agent, qumre.

    Appeal from a judgment in favor of the defendant, entered on the report of a referee, dismissing the complaint in an action upon a policy of insurance containing, among others, the following provisions : “ This policy of insurance witnesseth, that the directors of the Queen Insurance Company of Liverpool and London do, by these presents, cause Wellington A. Hardy to be insured $6,000 on merchandise, principally whiskey and packages containing the same, their own or held by them in trust or on commission, or sold but not delivered, contained in granite and brick building situate Nos. 213 and 215 State street, in Boston, Mass, (other insurance permitted without notice until requested), against all loss or damage to the same by fire for and during the term of twelve months,- commencing the risk the 21st day' of January, 1873, at noon, and to continue until the 21st day of January, 1874, at noon.”

      F. W. Bangs, for the appellant.
    It is not necessary that the insured should be invested with the legal title to the goods. [Be Forrest v. Fulton Ins. Go., 1 Hall, 84; Stilwell v. Staples, 19 N. Y., 401.) It is enough if he had the care, custody, sale and management of the goods. (lueena v. Crawford, 3 Bosanquet & P., 75 ; Code, § 113.) The facts found by the referee entitle the plaintiffs to judgment. (Code, § 330; Beaeh v. Coolce, 28 N. Y., 508 ; Brawn v. Winnie, 29 id., 400.)

      James Emott, for the respondent.
    An insurable interest, in respect to property held in trust, can only exist where the assured is entitled to some benefit, or is under some liability, in respect to the property insured. (lucena v. Orawford, 2 N. R. [Bos. & Pul.], 269 ; Seagrave v. Union Ins. Oo., 1 L. R. [C. P.], 305 ; De Forrest v. Fulton Fire Ins. Go., 1 Hall, 84.)
   Daniels, J.:

The action was upon a policy of insurance issued by the defendant to Wellington A. Hardy, by wdiich it insured him in the sum of $6,000, against loss and damage by fire, “ on merchandise, principally whiskey and packages containing the same, their own or held by him in trust or on commission, or sold but not delivered, contained in granite and brick building, situate numbers 213 and 215 State street, in Boston, Massachusetts,” for the period of twelve months, “commencing the risk the twenty-first day of January, one thousand eight hundred and seventy-tliree, at noon.” On the 29th day of October, 1873, a fire occurred in the premises mentioned in the policy, by which the property was destroyed and injured to an amount exceeding that stated in the policy. The property was not owned by the person named as the assured in the policy, but it belonged to Milton J. Hardy & Oo., a firm carrying on business in the city of New York. After the loss, the assured commenced the present action for the recovery of the amount mentioned in the policy, and his right to maintain it was placed upon the ground that he held the property in trust at the time of the fire, within the meaning of that term as it was used in the contract of the defendant. That, without doubt, was his relation to the property of the firm, situated in Boston, when the policy was executed. Por that property and the business carried on in Boston by means of it had, before that time, been placed in the name of the assured, by its voluntary transfer. But before the property destroyed by the fire was sent to Boston, his relation to the firm had been changed by a restoration of its business to its own name. And, accordingly, it can only be necessary to ascertain his position after that change, for the purpose of determining whether a recovery should be had by the plaintiffs, who now represent his interest as well as that of the firm of M. J. Hardy & Co. in the action.

The property was sent to Boston on the 24th of June, 1873, and it was there placed in certain premises which had been rented by the assured. The demise was orally made to him in his own name, but the lessors entered it as being made to the firm employing him. That was not then known to him, and when he was afterward informed of it he dissented from, the correctness of that supposition, and stated to the lessors that he had hired the premises for himself; and they seem to have been held upon that understanding; but the rent was paid out of the proceeds of the business of M. J. Hardy & Co. The effect of the transaction would seem to be that he rented and held the premises as a place of deposit of the property of and for that firm, and from thence it was from time to time delivered by a cartman, acting under his authority and directions. The assured had possession of one key and the cartman of the other; but the action of the latter was entirely subject to the authority of the former. From the property which was kept upon the premises sales were made by the assured, and a bank account maintained in the name of the firm, upon which he drew for funds as their use became necessary in their business. The assured had the oversight of the business of the firm in Boston, to which he went about once in each month; but it was chiefly transacted in New York, where the books were kept and the entries in them made. While the property was held and the business carried on in this manner the assured acted for the firm under the authority of a written power of attorney; by that he was authorized to sign the firm name “to all checks, notes, contracts and obligations necessary or proper for carrying on the business of the said firm in the city of New York, or elsewhere, and to make, execute and deliver all or any of such instruments as aforesaid, sell goods and merchandise, receive and collect moneys due us and take all necessary proceedings for that purpose, and to give receipts and discharges, and, generally, to do and transact all the usual, necessary and proper business of said firm in the city of New York, or elsewhere; giving and granting unto our said attorney, full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises as fully, to all intents and purposes, as we might or could do if personally present.” And the business managed and transacted by him was of the nature, so far as his acts are concerned, as this instrument described. It will be seen, therefore, that he was much more than a mere clerk; he was a general agent, having the custody and control of his principal’s property, with full power to preserve and dispose of it in the way he deemed most appropriate to the prosperity and success of their business, and liable to account to them for it or its proceeds when called upon for that purpose. The care, management and sale of the property constituted his employment; and to the extent of its continuance he was interested in its preservation. An entire or partial destruction of the property would necessarily end or abridge that employment; and the risk of loss in that manner was sufficient, by the way of interest, to entitle him to insure the property. In a general sense, too, and as that term is ordinarily used, he held the property committed to his custody in trust, for the firm; it was under his charge and subject to his disposition, and, to that extent, had been intrusted to him. He did not hold, or control, or sell it for himself, but for his principal; and that, in the ordinary signification of the term, was a trust.

The courts have gone very far in sustaining policies of the description of that executed in this instance. But no further than the interests and convenience of trade and business, and the probable intention of the parties justified. They are executed and received to meet the necessities and protect against the casualties of business as it is ordinarily transacted and carried on in commercial communities. The underwriters understand that to be their nature, and no injustice can be done to them if they are obliged to sustain the consequences of the risks intended and understood to be taken. A fair construction of the terms of the contract produces that result.

In the early case of Craufurd v. Hunter, (8 Term [D. & E.], 14), a policy taken by commissioners as trustees, who were “ to take into their possession and care all Dutch ships and effects detained or brought into the ports of Great Britain, and to manage, sell and dispose of the same to the best advantage, according to the instructions they should receive from his Majesty and his Privy Council” was held to be valid and the plaintiff entitled to recover upon it. And yet the interest of the assured in the property was less than that resulting from this power of attorney, which conferred an absolute right of sale. This case was very earnestly contested, and finally determined by the House of Lords (5 Bos. & Pull., 288, 289, 294), in favor of the assured. It was fully examined and thoroughly discussed in the case of Herkimer v. Rice (27 N. Y., 163), and the doctrine maintained by it approved. In Putnam v. Mercantile Ins. Co. (5 Met., 386), it was held that a commission merchant who was the consignee of a cargo, had such an interest in his anticipated commissions, in case of its safe arrival, as enabled him to insure it while on the voyage. And a similar decision was made in French v. Rope Ins. Co. (16 Pick., 397). In deciding the case of De Forrest v. Fulton Ins. Co. (1 Hall, 94), it was held by Jones, C. J., that a “ consignee who has the actual possession of the property, with plenary powers of sale, must be clothed with a special property in the goods, so as to enable him to effect a valid insurance upon them in his own name, and to entitle him to recover for the loss of them upon an averment of interest in himself.” (Id., 121.) And yet the rights of such a consignee in the property would manifestly be no greater than that of the assured in this case, who, though not entitled to commissions, would still have the right to a reasonable compensation for services in the custody, care and sale of the property under his charge. A similar conclusion was declared in Stillwell v. Staples (19 N. Y., 401), where cloth received to be manufactured into clothing was held to create such a trust in its custodian as to render it a proper subject of insurance under a policy delivered to him. It was there stated that “the words ‘intrust' may, with entire propriety, be applied to any case of bailment, where goods belonging to one person are intrusted to the custody 'or care of another, and for which the bailee is responsible to the owner.” (Id., 403.) Waring v. The Indemnity Fire Ins. Co. (45 N. Y., 606), went still further, and held that property sold and constructively delivered, but not removed, and in which, consequently, the custodian had no further interest, was within the protection of a policy held by him, which insured property sold, but not removed. And Folger, J., who delivered the opinion of the court, said that the term “held in trust” included property of which the insured had the care and custody, intrusted to him as the representative of another, and for which he was responsible to the owner. The right to insure, lie said, “is put upon the fact that having the possession of the property, exclusive as to all but the owner, to whom they are responsible, they have the right to protect,” it, “from loss, so that it or its value may be rendered to the owner when he calls for his own.” (Id., 610, 612.) Such a responsibility rested upon the agent who received the policy in suit, and that, with his custody of and interest in the continued existence of the property for the purposes of the business he managed and carried on under the power of attorney, was sufficient to entitle him to insure it against loss by fire in his own name. And, under the authorities already cited, the loss could afterward be recovered by him in an action on the policy for the benefit of his principals.

Instead of dismissing the complaint in the action, the learned referee should have held that the plaintiffs were entitled to recover. Possibly, the court has the power now to change the direction which was given and authorize a judgment in the plaintiff’s favor. But it will be more strictly regular to send the case back so that the findings in the report can be made to conform to the conclusions which the court deems to be warranted by the proof appearing in the case. The judgment should be reversed and a new trial ordered, with costs to abide event.

Davis, P. J., and Brady, J., concurred.

Judgment reversed, new trial ordered, costs to abide event.


author: Per Curiam:

text:
    ADELINE H. DOUGLAS, Appellant, v. GEORGE W. DOUGLAS, Respondent.

      Practice — exception to conclusion of law, when allowed to he filed nunc pro tunc — Code, §§ 174, 327.
    The court has power, under sections 174 and 327 of the Code, to allow.exceptions to be filed nunc pro tnmc to the final conclusion of the court in cases, where an appeal from the judgment has been duly taken, and the ground of such appeal is that the conclusion of law is not warranted by the findings.
    Appeal from an order made at Special Term, denying plaintiff’s application for leave to file an exception nunc fro tunc to the conelusion of law, as found, by tbe court on tbe trial, after appeal taken from the judgment.

      John L. Hill, for the appellant.
    The relief sought was purely formal. It was for neglect to except to conclusion of law, and that, too, when the intention to appeal had been exhibited by prompt service of the notice. The moving papers showed that the omission was by a mistake in practice. This fact was not controverted. The omission had not in the slightest degree prejudiced the defendant. If he had intended to appeal or move for a new trial such relief could very readily have been secured as terms of relieving the plaintiff. Indeed, no objection would have been made. The case was one which called for an exercise of discretion in favor of the plaintiff. It is difficult to understand why a court of equity should insist upon a point so purely technical in such a case. The court had found every fact in this lady’s favor, and the only question was, whether or not the law was powerless to redress a wrong which every enlightened conscience must pronounce an outrage. This General Term has power to review such an order. To hold otherwise would seem a denial of justice. The real question was only one of terms. The relief sought was a substantial right.

      B. O. Benedict, for the respondent.
    If exceptions had been served within the ten days, but had not been filed and made part of the judgment roll, as per section 281 of the Code, then a motion for leave to file such exceptions nunc pro tunc, and to have the same made a part of the judgment roll, would be quite within the customary practice in respect of filing papers nunc pro tunc, but the taking of exceptions, or the serving of exceptions nunc pro tunc, by order of the court or otherwise, is a thing unheard of. The difficulty in this case is that there are in fact no exceptions to the judge’s conclusions of law. No exception thereto was ever made or served, and there is, therefore, none to file; and the plaintiff cannot now provide herself with an exception which she never took, and to order the filing of an exception nunc pro time will be to make the record falsify the fact. It is well settled that the Code, section 17é, does not authorize the extension of time to appeal. (Waite v. Van Allen, 22 N. Y., 319; Eumphreij v V Chamberlain, 11 id., 274; 17 Abb. Pr., 86.) But to allow exceptions that never have in fact been taken, to be made and filed nune fro tune after the time limited by the Code has expired is, in effect, nothing but an extension of time to appeal. Section 268 provides, in respect of trials by the court, that “ for the purposes of an appeal, either party may except to a decision on a matter of law arising upon such trial, within ten days after notice in writing of the judgment, in the same maimer and with the same -ifect as upon a trial by jury. And either party desiring a review upon the evidence appearing, on the trial, either of the questions of fact or of law, may at any time within ten days after notice of the judgment, or within such times as may be prescribed by the rules of the court, make a case or exceptions in like manner as upon a trial by jury. But the question, whether of fact or of law, arising upon the trial, can only be reviewed in the manner prescribed by this section.” Bule 41 of the Supreme Court rules prescribes ten days from notice of entry of judgment. The Court of Appeals has, in the case of Hunt v. Bloomer (13 N. Y., 343), passed upon the question of the time of taking excejitions. (See, also, Enos v. Eigenbrodt, 32 N. Y., 444; 12 How. Pr., 481; id., 567.) As to the power of the court to allow exceptions to be filed nune fro tunc,, see Beach v. Raymond (1 Hilt., 202); Beach v. Gregory (3 Abb. Pr., 78); S. C. (2 id., 204). In all the cases where exceptions have been allowed to be filed after the expiration of ten days, it would seem that exceptions had actually been taken, though not filed, or the motion was for leave to file case and exceptions, or to incorporate exceptions actually taken in the case. This is the case in Sheldon v. Wood (14 How. Pr., 18); Bortle v. Méllen (14 Abb. Pr., 228); Strong v. Hardenburgh (25 How. Pr., 438). It is urged' that the serving and filing of exceptions is a mere matter of form, and the omission to file or serve a merely formal defect, which may be cured at any time. The same argument may be used in respect of filing and serving the-notice of appeal, and yet nothing is better settled than that,' if either of those formalities is omitted — if the notice is served on respondent, but not filed with the clerk, or vice versa — that is an omission which the court is powerless to cure. (See Cotes v. Ccvrroll, 28 How. Pr., 436; Morris v. Morange, 26 id., 247; 17 Abb. Pr., 86.) It is true-that a notice of appeal, once properly filed and served, maybe amended, bnt not in such a way as to change its substantial character, nor so as to enlarge its effect. (Fry v. Bennet, 16 How., 385 ; Bryants. Bryant, 7 Robt., 49 ; 27 How., 378.)
   Per Curiam:

"We think this court has the power, under sections 174 and 327 of the Code, to allow exceptions to the final conclusions of the court to be filed nuno fro tuno, in cases where an appeal from the judgment has been duly taken, and is dependent upon such findings only; in other words, where the appeal is based on the judgment record alone, the ground taken by the appellant being that the judgment is not warranted by the findings.

The omission- in this ease to file the exceptions was the result of a misapprehension of the practice. We do not mean to declare by this decision that a judgment may not in such cases be reviewed on the record alone.

We think the order should be reversed, and the privilege asked allowed.

Ordered accordingly, without costs.

Present — Davis, P. J., Brady and Daniels, JJ.

Order reversed.


author: Brady, J.:

text:
    CORNELIA AUSTIN, Respondent, v. HENRY SCHLUYTER and LIZZIE SCHLUYTER, Impleaded with CORNELIA B. DREW and GEORGE S. DREW, Appellants.

      Pleading — in ejectment — what must be averred — 3 P. S. (6th ed.), 672, §§ 7-10.
    In an action of ejectment, it is not necessary to state in detail tlie facts constituting the estate or interest claimed in the land, hut the general form or character of the estate or interest must he averred.
    Appeal by defendants from an order overruling a demurrer to the complaint, in an action of ejectment. The complaint was in the following form: “The plaintiff complains that, on the 1st day of December, 1871, she was possessed of all that piece of land (describing certain premises). And plaintiff being so possessed thereof the defendant afterward, on the 4th day of December, 1871, entered into said premises and unlawfully withhold from plaintiff the possession thereof to plaintiff’s damage $100. The plaintiff demands possession of said premises.”

      George W. Stephens, for the appellants,
    cites 2 Revised Statutes, 304; Tyler on Ejectment, 34, 44, 616; Ensign v. Sherman (14 blow. Pr., 439); St. John v. Pieroe (22 Barb., 362); People v. Van Rensselaer (9 N. Y., 318); Howard v. Hatch (29 Barb., 306); Walter v. Lockwood (23 id., 233); Sanders v. Leary (16 How. Pr., 312); People v. Mayor (28 Barb., 248); Doming v. Miller (33 id., 386); 2 Greenleaf on Evidence, § 204; Friend v. Holme (21 How., 481).

      Thomas B. Browning, for the respondent,
    cites Day v. Alder-son (9 Wend., 223); Blunt v. Aiken (15 id., 526); Hill v. Draper (10 Barb., 455); Enders v. Sternburgh (52 id., 222); Bartow v. Draper (5 Duer, 130); Olute v. Voris (31 Barb., 511); Brewster v. Stryker (1 E. D. Smith, 321).
   Brady, J.:

The complaint alleges that the plaintiff was possessed of the pi-emises described, on a certain day, and that being so possessed the defendants entered upon the premises and unlawfully withheld them from her. The defendants demur. Does the complaint contain facts sufficient to constitute a cause of action ? The Revised Statutes provide that it shall be sufficient for the plaintiff to aver, in his declaration, that on some day therein to be specified, and which shall be after his title accrued, he was possessed of the premises in question, describing them as thereinafter provided, and being so possessed thereof, the defendant, afterward, upon some day to be stated, entered into such premises, and that he unlawfully withholds from the plaintiff the possession thereof, to his damage, any nominal sum the plaintiff may think proper to state. (3 R. S. [6th ed.], 572, § 7.) The complaint in this action is in strict accordance with the requirements of the section quoted, and if there were no other provisions governing the subject, there would be no difficulty in answering the question stated. The following (tenth) section of the statute (page 573), provides, however, as follows: If the action be brought for the recovery of dower, the declaration shall state that the plaintiff was possessed of the one undivided third part of the premises as her reasonable dower as widow of her husband, naming him. In every other case the plaintiff shall state whether he claims in fee or whether he claims for his own life or the life of another, or for a term of years, specifying such lives or the duration of such term.” These provisions would seem to be in conflict, because it is declared that it is sufficient for the plaintiff to state that he was possessed of premises which were entered upon and unlawfully withheld from him by the defendant; and again, that the plaintiff must state the nature of his claim, whether in fee or otherwise, but they are not,- embracing as they do two essentials to the plaintiff’s action, namely, the possession or right of possession, and the title or estate of which that possession is predicated.

The Code, by section 455, provides thq,t the general provisions of the Revised Statutes relating to actions concerning real property shall apply to actions brought under it according' to the subject-matter of the action, without regard to its form. The subject-matter is the loous in quo, in other words, the premises described. In Ensign v. Sherman (14 How. Pr., 439) Strong, J., recognizes the blending of the provisions of the Revised Statutes, supra, by stating that the plaintiff is required by them, in every case except an action of dower, to state the nature of His claim, whether in fee or otherwise, and such being the rule, it follows that the complaint in this action was not sufficient under the law as it stood prior to the Code. This view is in effect confirmed by the case of Walter v. Lockwood (23 Barb., 228), to which the plaintiff’s counsel referred. The plaintiff in that case averred that he had lawful title as the owner in fee simple, and Balcom, J., said that the form of the complaint need not be like actions of ejectment in suits under the Revised Statutes. “ The complaint in actions to recover the possession of real property must state facts, not fictions, and its sufficiency must be tested by the Code, and not by the Revised Statutes.” It was also said by that learned justice that Harris, J., erred in supposing the mode of pleading in such actions prescribed by the Revised Statutes to be still in force. (See 12 How. Pr., 402.) In the case referred to by Justice Balcom, the plaintiffs alleged that they were the owners and lawfully possessed of certain lands described. Justice Harris said: It is enough now, as it was before the adoption of the Code, for the plaintiff, in an action to recover the possession of land, to state what estate he claims in the land, and that he was in possession, etc., and thus he recognizes the rule that something more than the allegation by the plaintiff that he was possessed of and his possession disturbed and withheld, was and is necessary in an action of this character. Justice Sutherland, in The People v. The Mayor (28 Barb., 248), says: It may be said to be pretty well settled now that in an action of this kind it is only necessary for the plaintiff to allege in his complaint that he is séized or possessed of some certain estate in the premises, and entitled to the possession, which is unlawfully withheld, and thus he recognizes the requirement which demands a statement of the nature of the claim.

All the cases, since the Code, which have been found, sustain the proposition which is in accord with the provisions of the Revised Statutes, that the plaintiff must allege the nature of his claim. It is not necessary to state it in detail, or the facts constituting the estate or interest claimed in the land, but the general form or character of the estate or interest must be averred. It may be said, therefore, that whether the provisions of the Revised Statutes apply or not, the same rule now exists which they declared, and that is, that in actions of this kind the plaintiff must aver whether he claims in fee or otherwise. The complaint is insufficient, therefore, and the order appealed from must be reversed with ten dollars costs and the disbursements of this appeal.

Daniels, J., concurred.

Order reversed, with ten dollars costs and disbursements.


author: Brady, J.: Daniels, J. :

text:
    THE GROCERS' BANK OF THE CITY OF NEW YORK, Appellant, v. THOMAS D. PENFIELD, BENJAMIN D. STONE and CHARLES H. TRUAX, Respondents.

      Accommodation paper — consideration for, in hands of third party — Extension of credit — when implied — Facts, when renewable by General Term— Gode, §§ 268-272.
    A party receiving accommodation notes, without parting with any consideration, cannot recover on them ; but an agreement for an extension of the time of credit of an existing debt will be sufficient consideration, and this may be implied from circumstances without any thing being said concerning the extension. An express agreement for the suspension of the remedy is not necessary.
    Where accommodation paper is diverted to some purpose for which it was not to be used, the holder must show that he is the owner in good faith and for value; but where the use made of it is consistent with the object for which it was executed, any valid consideration will sustain an action upon it by the holder.
    Accommodation paper, if used for the purpose for which it was given, is available in the hands of one holding it only as collateral security, and for no new consideration. (Brady, J.)
    The General Term can review the facts, where the trial has been before the court without a jury, or before a referee.
    Appeal from a judgment in favor of the defendants, entered on the report of a referee dismissing the complaint in an action upon a promissory note.

      Edmon & B. J. Blankman, for the appellant.

      C. H. Truax, for tlie respondents.
   Brady, J.:

The defendant Truax was a depositor with the plaintiffs. He procured from them the discount of a note made by Reon Barnes to his order. When it became due he paid a part of it, and gave two notes of Penfield and Stone, the other defendants, payable to his order, for the balance.

These notes were made for his accommodation, but without restriction as to their use. It seems, from the testimony, that they were obtained for the purpose to which they were applied, and it may be said, as also warranted by the testimony, that the plaintiffs knew that they were made for his accommodation. The plaintiffs, when the notes were given, refused to give up the prior note made by Barnes, and parted, therefore, with no new consideration.

The defendants Penfield and Stone think that, under these circumstances, the notes cannot be enforced against them, and the referee agrees with them. They are mistaken. The notes having been given without restriction as to their use are available in the hands of one holding them only as a collateral security. (East River Bank v. Butter worth, 45 Barb., 476; Cole v. Saulpaugh, 48 id., 104; Edwards on Notes, 316.) It is only when a note is diverted from the purpose for which it was made, or fraudulently obtained and negotiated, that such a defense can be successfully interposed. (Bay v. Coddington, 5 Johns. Ch., 637; Farrington v. Frankfort Bank, 24 Barb., 554; Weaver v. Barden, 49 N. Y., 286; Cary v. White, 52 id., 138; Barnard v. Campbell, 58 id., 77; Edwards on Notes, 316.)

In such cases, unless the holder parts from something of value, money, property, or existing securities, or discharges the pre-existing debt for which the note is given, the note cannot be enforced.

It is considered, unless the element suggested be present, that the holder is not one for value within the law-merchant, and the superior equities must prevail.

The statement of the rule is not always accompanied by the qualification mentioned, and leads to confusion in some minds.

The judgment, for these reasons,.must be reversed, with costs to abide the event.

Davis, P. J., and Daniels, J., concurred.

Daniels, J. :

The action was prosecuted against the defendants defending, as the makers of two promissory notes, dated on the 25th and 28th days of August, 1873, respectively, by which the defendants promised to pay to the order of Charles H. Truax, in sixty days after such dates, $1,150 by the first, and $670.77 by the second of the notes, at the Grocers’ Bank, for value received. It appeared from the evidence of Truax, who was the only witness examined upon the trial, that the notes were made for his accommodation, and without any consideration between him and the makers. When they were made lie was a depositor in the Grocers’ Bank, which held his note then coming due, on which he was indebted in the sum of $2,191.07. He had on deposit about the sum of $385.19, and had drawn a cheek for seventy-five dollars, which the officers of the bank declined to pay. An interview then took place between himself and Mr. White, an officer of the bank, in which the latter insisted that the check must be withdrawn and another given to the bank for the whole amount on deposit; and figures were given for the purpose of having new notes made for the residue of the indebtedness. The notes in suit were made and delivered to the payee, and he indorsed and delivered them to the bank, and at the same time gave it his check for the amount of his deposit. Mr. White was asked to deliver up the preceding note, but declined to do so, and nothing was parted with by the bank on the credit of the defendants’ notes. No information was given that the notes had been - made for the accommodation of the payee, and nothing was said about forbearance on the debt owed by him at the time of their delivery to the bank; but the witness said he supposed that would be the result, and that he was not disturbed nor sued until these two notes became due. The referee, substantially, found the evidence of this witness to be true, and that the bank parted with no consideration for the notes, but received them as collateral security for a precedent debt, and made no agreement to extend the time of payment of that debt. Upon these facts it was held that the plaintiff could not recover against the makers of the notes, and judgment was directed in their favor.

The makers having received no consideration for the execution of the notes by them, but having made them solely for the accommodation of the payee, he could not have maintained an action upon them for the recovery of the amounts for which they were given. Between these parties the notes created no legal obligation. They were a mere loan of the makers’ credit, which the payee could use in any manner beneficial to himself. Any party receiving them from him, upon a lawful consideration, would have the right to recover their amounts from the makers; but a consideration was necessary for the creation of that right. Without it the party receiving the notes would have no more right to enforce tiiem by action than the payee himself, for whose accommodation they were made. The evidence showed that the bank parted with neither money nór property for them; it surrendered nothing of that nature whatever, and unless its remedy on the preceding debt owing to it was suspended by means of what transpired there was no consideration for the delivery of the notes to it.

No agreement of that nature was expressly made between the parties to the transaction. If it existed at all'it was to be implied from what was said and done before the notes were made, and at and after the time when they were received by the bank; and that will probably be a safe conclusion under the authority of the case of Place v. McIlvain (38 N. Y., 96), and those cited in the prevailing opinion. They hold that an agreement for an extension of the time of credit may be implied from circumstances no more cogent than those shown to have existed in the present case. A different conclusion was deemed proper in the case of Cary v. White (52 N. Y., 138), but the facts were of a much more limited nature than they were in the other case. All tiiat appeared was that the bond and mortgage in controversy were given to secure a sum of money payable, by their terms, at a future time, without any agreement for a corresponding extension of the preceding indebtedness; and it was held that no agreement for such an extension was established by the facts shown, while in this case the facts indicate the existence of such an understanding. They show that the officer with whom the business was transacted, on the part of the bank, desired to obtain further security by way of notes for the debt, and that the debtor procured and delivered them for no other apparent object than to secure an extension of credit. That was not mentioned in words, but what was suggested and performed is reasonably consistent witli no other understanding. It is not uncommon for banks to require further security from their debtors, without any thing being said concerning the extension of the time of payment of their debts, but that is understood and implied from the performance of what may be requested. If it were not, the creditor would rarely expect compliance with its wish; and the debtor anticipating no benefit to himself would make no effort to extend his obligations for payment. Such transactions are supposed to be attended with mutual advantages.

The creditor’s securities are increased with the expectation of obtaining further indulgence and forbearance by the debtor. If it had been understood that the bank could take the notes and before they matured institute proceedings to recover the preceding obligations of its debtor, no reason exists for believing it would have been allowed to receive them. The object and design indicated by the facts was the delivery of a further security, for an extension of the credit, and that was evidently the result of what transpired, for a further credit was given for the time the notes had to run. The additional security supplied by the fact that the notes were made by the defendants was a good consideration for a further forbearance of the debt, and it may be presumed from the circumstances that such was the intention and expectation of all the parties. An express agreement for the suspension of the remedy and the extension of the time of payment was not necessary, That, like other agreements, could properly be inferred from any state of facts showing that it was understood and acted upon. The facts in this case were sufficient for that purpose, and they should have been held to be so by the referee. With that found in the plaintiff’s favor its right to recover upon the notes would be complete, for a creditor receiving an accommodation note from a debtoi-, for an extension of time for the payment of the debt, can enforce it against the parties to it, when that use of it is not inconsistent with the purpose for which it may have been given to the debtor. Whatever may be an injury to the party receiving, or a benefit to the party delivering it, will he a sufficient consideration to give such a note legal vitality, and an extension of the time of payment of an existing debt is a fact of that nature. (Freeman v. Freeman, 43 N. Y., 34, 39; Seneca County Bank v. Neass, 3 Comst., 443; Agawan Bank v. Strever, 18 N. Y., 502; Spencer v. Ballou, id., 327; Elting v. Vanderlyn, 4 Johns., 237; Watson v. Randall, 20 Wend., 201; Schepp v. Carpenter, 49 Barb., 542.)

A different principle governs the right of the holder of accommodation paper, diverted to some purpose for which it was not to be used. There the holder can only recover upon it by showing himself to be the owner in good faith and for value. (The Merchants' Bank of Syracuse v. Comstock, 55 N. Y., 24.) But where the use made of it is consistent with the object for which it may have been executed, any valid consideration will be sufficient to sustain an action upon it by the holder.

Oases have been referred to in support of the judgment, in which it has been held that it cannot be reversed without findings of fact showing it to be erroneous. That is the rule in the Court of Appeals, where the power of review is confined exclusively to legal questions, but they do not control the review by the General Term, which has been required to examine into the facts as well as the law of the case, when the trial has been before the court without a jury or a referee. (Code, §§ 272, 268.) The referee in this case erred in not finding from the evidence, as a matter of fact, that the plaintiff received the notes in consideration of forbearance of the time of payment of the debt on which it received them as collateral security. Such a finding was required by the proof made on the trial, and that would have resulted in a judgment for their amount in the plaintiff’s favor. The judgment should be reversed and a new trial ordered, with costs to abide the event.

Brady, J., concurred in the result.

Judgment reversed, new trial ordered costs to abide event.


author: Brady, J. :

text:
    WILLIAM BARKER, as Administrator, etc., of SMITH BARKER, Deceased, Appellant, v. NEWTON W. HOFF, Trustee of the Estate of JOHN PENTZ, Deceased, Respondent.

      Maxim pari delicto potior est conditio defendentis — when applicable.

    When one of two wrong-doers seeks an advantage arising from, or the benefit of an unlawful combination, the defendant’s position is the better; but this rule does not apply where the plaintiff makes no demand upon, and the claim in question does not grow out of the unlawful transaction, and such transaction furnishes him with no claim, benefit or advantage.
    Appeal by the plaintiff from a judgment at Special Term dismissing the complaint upon the pleadings.

      The action was brought to recover for commissions and expenses earned and incurred by Smith Barker, the plaintiff’s intestate, as trustee of the estate of John Pentz, deceased.
    The answer set up an account stated, made and rendered by the plaintiff, and full and complete payment and satisfaction.
    The plaintiff replied, alleging that, at the request of the defendant, and to induce one Sylvanus Townsend to consent to act as trustee of the estate of John Pentz, he made up and signed the statement of account set up in the answer, but that it was made not as a final settlement, but to show to said Townsend in order to induce him to act as trustee, and that it was then agreed that as soon as a trustee should be appointed a full accounting should be had. The court dismissed the complaint upon the pleadings.

      Rowan & Ilelm, for the appellant.
    The pleadings raised a question of fact to be tried by the court. To be an account stated, it must be between the parties. (1 Story Eq., § 526; 2 Greenl. on Ev., § 126, and cases cited; Bloodgood v. Brown, 8 N. Y., 362; Lockwood v. Thorn et al., 18 id., 285; Breckon v. Smith, 1 Ad. & Ell.; Evans v. Verity, Reg. & M., 239.) It is not an estoppel. (.Hutchinson v. Market Bank, 48 Barb., 302.) An admission of the account is not conclusive, but any error may be shown and corrected under the general issue. (2 Greenl. on Ev., 119, § 128; Holmes v. Be Camp, 1 Johns., 36; Bates r. Townley, 2 Exch., 152; 12 Jur., 606.)

      George Hill, for the respondent.
    The plaintiff is, on his own showing, ili/npari delicto,” and the maxim “ in pari delicto potior esi conditio defendentis,” will apply with fall force to the plaintiff in the case at bar. (Broom’s Maxims [6th ed.], 702; id., 710; People v. Burden, 9 Barb., 467-470; Winter v. Sadler, 3 Johns., 185; Hawks v. Hunger, 2 Hill, 200; Bezell v. Odell, 3 id., 221; Pickard v. Sears, 6 Ad. & Ell., 474.) Parol evidence, to contradict or vary a written instrument, is inadmissible. (Buckley v. Bently, 48 Barb., 283; Renard v. Sampson, 2 Kern., 561; 2 Phillips on Ev. [4th Am. ed.], 684; 1 Greenl. on Ev., § 275.) Evidence of the matters attempted to be set up in the reply would be properly rejected on the ground that they are facts which should be set up in the complaint. (Brown v. McCune, 5 Sand., 224; White, Pec., v. Joy, 11 How., 41; S. C., 13 N. Y., 83; 2 Tan Sant. Eq. Pr., 166,167; 1 Daniells’ Ch. Pr., 347, 616; 1 Story’s Eq. Jur., §§ 526, 527; Story’s Eq. PL, § 800; Weed v. Smull, 7 Paige, 573, by Walworth, Chancellor, in 1839 ; Pm'kinson v. Hanbury, 2 L. R, [House Lords], 1.) “ Courts of equity will not open a settled account where it has been signed” (as in the case at bar) “or a security has been taken on the foot of it, unless for fraud or for errors distinctly specified in the bill and supported by evidence.” (Story’s Eq. PL, § 800; Lockwood v. Thorn, 11 N. Y., 170; Parkinson v. Hanbury, supra', Chappelaine v. Dechenaux, 4 Cranch [S. O.], 306.)
   Brady, J. :

The defendant sets up as a defense an account stated, signed by the plaintiff as the administrator of Smith Barker deceased, which he avers was delivered to him and accepted and retained by him. The plaintiff replies that the account referred to was prepared at the request and with the assistance of the defendant for a specific purpose, namely, to induce Sylvanus Townsend to qualify as an executor and trustee of John Pentz, deceased; that the defendant dictated it; that it was not intended as a final settlement of the accounts between the estates, nor as an account stated, and that the defendant promised and agreed when the account was handed to him and as an inducement to the plaintiff to sign the certificate, that a full accounting should be had between the estates as soon as a trustee was appointed. It seems that Mr. Townsend refused to qualify “ unless he could see a statement or account made up as to how said estate of John Pentz stood with the said Smith Barker or his estate.” The reply contained no averment that the account thus signed was in any respect erroneous, but that it was made as stated upon the request of the defendant, and for a particular purpose. The complaint was dismissed and judgment rendered for the defendant on the pleadings. The learned justice at Special Term seems to have applied the principle in pari delicto potior est conditio defendeniis, because the plaintiff united with the defendant to deceive a third party, namely, Mr. Townsend, by making an account which was apparently, but not actually, an adjustment of the existing accounts between the estates. The account thus prepared does not seem to have accomplished the purpose, Mr. Townsend not having qualified, and it does not appear in what way Mr. Townsend would have been injured or the plaintiff benefited, if Mr. Townsend had qualified as it was desired he should. It must have been a matter of little moment to the plaintiff who was appointed trustee in the absence of any evidence of collusion, to obtain payment of the claim he urged against the estate of Pentz, and a matter of little consequence to the trustee what was the condition of the accounts between the estates, except the labor which might be required if they were marked by complications. It appears also, for such is the allegation in the reply, that the qualification of Mr. Townsend was the wish of the defendant, and to gratify which the account was made up. This design having been disclosed, it was wrong in the plaintiff to have assented to the proposition of the defendant, but it did not in fact do wrong to Mr. Townsend because he did not qualify, and the plaintiff is not seeking to obtain from the defendant any benefit or advantage from the arrangement made in reference to Mr. Townsend, or to urge any claim or demand which was not reserved between him and the defendant, when that arrangement was made. The claim, in other words, does not grow out of that transaction or any thing connected with it in any way. It is an independent demand, if it exist at all, in favor of the estate of an intestate, and therefore the maxim applied does not govern it. "When one of two wrong-doers seeks an advantage arising from, or the benefit of, the unlawful combination, the defendant’s attitude is the better one, and the maxim quoted applies, but this is not such a case. The plaintiff makes no demand upon it, and it furnishes him with no claim, benefit or advantage. It imposes upon him in fact the burden of showing that the account of which it was a part, was not intended for what it appears to be, and in that way in effect gives the defendant the better position in reference to it. If it was not given as an account stated, the accounts are still open, and if it was, under the forms of pleading adopted and the allegations made, the plaintiff is remediless in this action. The issue presented as to the character of the account should for the reasons assigned have been tried. The defendant was not entitled to judgment on the pleadings therefore, and the order granting it was erroneous.

The judgment must be reversed but without costs to the appellant.

Davis, P. J., and Daniels, J., concurred.

Judgment reversed without costs.