text:
    ANDERSON FOWLER and others, Plaintiffs, v. THE LIVERPOOL & GREAT WESTERN STEAM COMPANY, Defendant.

      Contract hy common carrier to receive <md transport goods — what an excuse for not forwarding them Try the first conveyance.

    October 14, 1889, the defendant engaged to transport for account of the plaintiffs on board its steamship Minnesota or Nevada, for Liverpool, three hundred bales of cotton at J^d. per pound; at thattimethe cotton was on its way from Mobile, the date of its arrival being uncertain. The Minnesota was to sail on October 37, and the Nevada on November 8. The cotton arrived on October 38; and was all delivered at the defendant’s pier by the 36th. When it arrived there was sufficient cotton loaded, and on the pier, which had been specially engagedforthe Minnesota, to fill that vessel. For that reason the plaintiffs’ cotton was not taken hy that ship, but was taken hy the Nevada, and arrived in Liverpool seven days after that taken by the Minnesota.

    In an action brought by the plaintiffs to recover damages, occasioned by a fall in the price of cotton, between the times of the arrival of the two ships, Held, that they were not entitled to recover.

      Motion for a new trial on exceptions ordered to be heard in the first instance at the General Term, after a verdict in favor of the plaintiffs directed at the Circuit.

      O. Vcm Scmtvoord, for the plaintiffs.

      8. P. Nash, for the defendant.
   Dykman, J. :

The broker’s memorandum of the contract between these parties is as follows:

“ New York, October 14, 1869.
“ Engaged for account of Eowler Brothers, on board steamship Mi/rmesota or Nevada, for Liverpool, three hundred bales of cotton, at VA. per lb. Pier 46 North river.
“CAREY & YALE, Agents.
“WILLIAMS & GUION, 71 Wall street.”

At this time the Minnesota was advertised to sail for Liverpool from New York, on October 27, 1869, and the Nevada was advertised to sail from the same for the same port, on November 3, 1869, and the cotton was on its way from Mobile, with the day of its arrival uncertain. It did reach New York on October 23, and sixty-two bales of it were sent to Pier 46 North river, on October 25, and the remaining two hundred and thirty-eight bales were sent to the pier on October 26, and by mistake receipts were given for the cotton by the receiving clerk, for the steamer Minnesota. The clerk had no authority to exercise any option under the contract. When this cotton reached the pier the defendant had cotton there more than sufficient to fill the Mi/nnesota, engaged specially for that vessel, and she sailed with a full cargo without the cotton of the plaintiff. The only reason for not taking this cotton on the Minnesota, was that she was already full with cotton received before it. She arrived out on November 7. The cotton of the plaintiff went on the Nevada on November 3, and she reached Liverpool on the 14th. Between the 7th and the 14th there was a fall in the market value of cotton, and this action is brought for the recovery of the difference as the plaintiffs’ damages. At the Circuit a verdict was directed for the plaintiffs, and the exceptions were directed to be heard first at the General Term.

The defendant is a common carrier, and without the contract would have been under legal ■ obligation to receive and carry the plaintiff’s goods when offered for transportation, provided its vessel was not then full, and the goods were brought in a reasonable time. (Angelí on Carriers, § 125.)

If, however, the goods were offered when the vessel was full, or when they could not be loaded before the arrival of the time to sail, then the defendant might send them on by the next vessel.

The contract substituted no different engagement. The plaintiff secured by it the right to transportation by the Mmnesota, if the property arrived in a reasonable time for that vessel. That right was secured to them by the law, but the defendant was under no obligation to refuse other freight, or reserve space for this cotton when it was uncertain whether it would reach New York before the sailing time of the vessel. The agreement must be construed as an undertaking to carry by the Minnesota, if received in time for that vessel; if not, then by the Nevada.

The uncontradicted testimony is that, at the time this cotton came, the cargo of the Mmnesota was complete; that there were goods sufficient for her lading then on board, or on the pier, in advance of this cotton, specially engaged for that vessel. That was a sufficient excuse for refusing to take the goods by that vessel, both under the law and under the contract.

Neither were the primary receipts of the receiving clerk an election to transport by the Mvrmesota; they were given by mistake and were not intended for such purpose by either party. They were intended only as memorandums, from which the bill of lading was subsequently to be made. They were in no sense contracts, and the clerk had no authority to make contracts for the defendant.

The result of this examination is that, by the refusal to transport the cotton by the Minnesota, the defendant-violated neither his contract nor the law, and the plaintiff can have no recovery in this action.

Judgment reversed, and new trial granted, costs to abide the event.

Barnard, P. J., concurred.

Present — Barnard, P. J., Gilbert and Dykman, JJ.

Exceptions sustained, and judgment reversed, and new trial granted, costs to abide event.


source: Caselaw Access Project

author: Dykman, J.:

license: Public Domain

text:
    GEORGE L. KENT, Appellant, v. THE QUICKSILVER MINING COMPANY and others, Respondents. WILLIAM S. HOYT, Respondent, v. THE QUICKSILVER MINING COMPANY, Respondent, and GEORGE L. KENT, Appellant.

      Appeal — when none lies from an order refusing to confirm the report of a referee.

      No appeal lies from an order refusing to confirm the report of a referee appointed by an interlocutory judgment to take proof of certain facts and report the same to the court before which an action is being tried, to enable it to make and render a final judgment therein, when such refusal is based upon the insufficiency of the report, and is accompanied by an order requiring the referee to furnish more specific facts.
    Appeal from an order made at Special Term, denying a motion -to confirm the report of a referee, appointed to take and state the facts, under an interlocutory judgment entered herein, and for a •final judgment; and from so much thereof as sent the matter back to the referee to re-state the accounts in accordance with certain .specific directions therein contained.

      Geo. 8. Hamlin and Grosv. P. Lowrey, for the appellant.

      Joshua, M. Yam, Gott, for the Mining Company, respondent.
    Field, Borsheimer, Bacon & Beyo, for Marston, Elint and "Wright, preferred stockholders.
   Dykman, J.:

This appeal should be dismissed. It is from an order made at Special Term, denying a motion to confirm a report of a referee, which he had made to the Special Term, of certain facts, which the judge wanted, to enable him to make a final judgment. He was-not satisfied with the report, because it did not furnish him with the facts deemed essential by him, and he refused to confirm it, ahd made an order requiring the referee to furnish more specific facts. Nothing has been determined in this case which is the subject of an appeal at this stage of the case. The judge at Special Term might have taken the testimony and ascertained the essential facts-for himself, but it was more convenient to obtain them through a. referee, and if on the coming in of the report it did not sufficiently inform the judge, it was entirely competent and proper to require more information. It would be a strange proceeding to refuse the judge at Special Term all the information necessary to enable him to write an intelligent judgment, and equally strange to review preliminarily his order made to procure the same, before his judgment is written.

- Appeals dismissed, with costs and disbursements.

The same disposition should be made of the appeal in the case of "William S. Hoyt.

Gilbert, J., concurred; Barnard, P. J., not sitting.

Appeals in these cases dismissed, with costs and disbursements.


text:
    LOUIS FLEISCHMANN, Respondent, v. JAMES GORDON BENNETT, Appellant.

      Action for libel — a demurrer will lie where it appears from the complaint that th& libel did not refer to the plaintiff.

    In this action, brought against the proprietor of the New Torio Herald, to recover damages for a libel, alleged to have been published concerning the plaintiff, the complaint alleged that the plaintiff was engaged in carrying on business as a baker and restaurant-keeper, in the city of New York, and was not and never had been in any manner a copartner, owner or agent in. any business or calling, such as described in the libel, or in the production of milk, or distillery swill, so-called, or distillery waste or grain, or ownership or care oí cows, or keeping or feeding of cows; it then alleged that the-defendant published concerning the plaintiff an article, which it set forth in full, which related to a swill milk establishment, kept by Gaff, Pleischmann, & Go., in Queens county.

      Held, that a demurrer interposed to the complaint, on the ground that it appeared therefrom that the libel was not published of or concerning the-plaintiff, should be sustained.
    Appeal from an interlocutory judgment entered upon an order-overruling a demurrer to two of the causes of action set forth in the complaint. The action was brought to recover damages for an alleged libel published by the defendant as the proprietor of The New Yorlc Herald, relating to the swill milk business in. Queens county.
    The complaint alleged:
    “1. That tbe plaintiff, prior to and at. the time of the commission of the grievances hereinafter mentioned, was engaged in business in the city of New York, at the corner of Broadway and Tenth street, as proprietor of the “ Yienna Model Bakery,” and conducted the business of a bakery and restaurant upon said premises.
    “ II. That, until ’then, this plaintiff bad always maintained a good reputation and credit, and had never been guilty of any violations of the laws of this State, nor been in any manner a co-partner, owner or agent in any business or calling such as described in the libel hereinafter set forth, or in the production of milk, or distillery swill, so-called, or distillery waste or grain, or ownership, or care of cows, or keeping of cows, or feeding of cows, or guilty of any of the offenses charged against him in the libel hereinafter-set forth ; nor, until the publication thereof, was he ever suspected to be.
    “ III. That the business of this plaintiff as bakery and restaurant keeper has always depended largely on the good reputation and credit of tiffs plaintiff, and on the personal trust reposed in him, and in the said articles manufactured and sold by him; and that this plaintiff, up to the publication of the said libel hereinafter set forth, possessed a valuable and lucrative business and custom.
    “ IY. That, at the time hereinafter mentioned, the defendant was tbe editor, publisher, and proprietor of the “Hew 7orle Herald,” a newspaper published daily at the city of New York.
    “V. That, on May 13, 1877, the defendant, well knowing the premises, maliciously composed and published concerning the plaintiff, and concerning the premises, in said newspaper, the false and defamatory matter following, to wit
    It then set forth an article relating to the swill milk business, carried on in Queens county, by Gaff, Fleischmann & Co., but which did not refer to the plaintiff by name or description, nor to his restaurant nor place of business. Five other articles published by the defendant were then set out.

      Elbridge T. Gerry, for the appellant.

      H. T. Wood and W. D. Veeder, for the respondent.
   Dykman, J.:

This action is for libel, and the defendant has interposed a demurrer to the first and second cause of action set down in the complaint.

The demurrer is founded on the position that the articles complained of in these two counts were not published of or concerning the plaintiff, according to the portion of the complaint objected to. If this is so they contain no libel of the plaintiff, and the whole •complaint must be taken together in determining, upon demurrer, whether it contains a cause of action, as well the allegation tending to discharge as those tending to charge the defendant, (Calvo v. Davies, 73 N. Y., 211.)

It is alleged in this complaint, almost at its commencement, that the plaintiff had never been guilty of any violation of the laws of this State, nor been in any manner a copartner, owner or agent, in any business or calling such as described in the libel thereinafter set forth; or in the production of milk or distillery swill, or distillery waste or grain, or ownership or care of cows, or keeping of cows, or feeding of cows, or guilty of any of the offenses charged in the libel. It is thus averred that the business of the plaintiff is that of a baker and restaurant-keeper in the city of New York, and he is in possession of a valuable and lucrative business and custom.

Thus the averment is, that the defendant published concerning "the plaintiff, and concerning the premises, two articles in the New York Herald which are set out, and which have reference alone to Gaff, Fleischmann & Co., distillers in Queens county.

In other words, the plaintiff charges that the defendant published libelous articles concerning him, and sets out the articles complained of, which show that they had no reference either to the plaintiff or his business.

Numerous definitions have been made of what constitutes an actionable libel, but from none has been omitted the important -element of application of the libel to the plaintiff. It must be censorious toward the complainant, and our view is that the complaint ■objected to by this demurrer contains no such element, and has no reference to the plaintiff.

It is as if the plaintiff should say, the defendant, intending a libel •on him, published a libelous article concerning another. This, in substance, is what the plaintiff, does say.

The judgment appealed from must be reversed, with costs, and judgment rendered for the defendant on the demurrer, with costs; with leave to the plaintiff to amend in twenty, days on payment of oosts.

Barnard, P. J., concurred ; Gilbert, J., not sitting.

Judgment reversed, with costs and disbursements.


text:
    ROBERT C. EMBREE, Respondent, v. MIRIAM L. FRANKLIN, Appellant.

      Ma/rried woman — not liable upon a contract made by her, for the benefit of a trust estate held for her.

    The father of the defendant, a married woman, gave to his executors one- . fourth of his property in trust, to pay the income thereof to her during her life, with power to her to dispose of the principal by her last will and testament, and in case she failed so to dispose of it, then he gave the same to her children. Upon the settlement of the accounts of the executor before the surrogate, the defendant employed the plaintiff, an attorney, to appear and protect her interests, which lie did.
    In this-action, brought by him to recover the value of the services so rendered,. Held,, that as the defendant had no estate in the property held by her trustees, but only a right to enforce the performance of the trust in equity, the contract was not for the benefit of her separate estate, and that she was not liable-for the services rendered thereunder.
    Appeal from a judgment in favor of the plaintiff, entered upon the verdict of a jury, and from an order denying a motion for a. new trial, made upon the minutes of the justice before whom the action was tried.

      G. W. Pleasants, for the appellant.

      Robert G. Embree, for the respondent.
   Dykman, J.:

The best idea that can be gathered from the obscure statement, of facts contained in the appeal booh, is that the defendant was. one of four children of Thomas H. Leggett, deceased, who died in Queens county, leaving a last will and testament, and leaving property, both real and personal. One-fourth of his property was given to-the executors in trust, to pay the income thereof to the defendant during her lifetime, and she was given the power to dispose of the-principal by last will and testament, but in case she died intestate-then her share went to her children.

There came a time when the executors were to render and settle, their accounts before the surrogate of Queens county, and the defendant employed the plaintiff, who is a lawyer, to attend to her interests in her behalf on the accounting. He did attend to the. matter in pursuance of his retainer, faithfully and well, and this action is brought Ijy him for the recovery of his charge for that, service. The cause was tried at the Circuit, when a verdict was rendered for the plaintiff. All the questions of fact are thereby settled in his favor. The defendant is a married woman, and the defense set up by her to this action is that her disability arising from her coverture renders void the contract which she made with the plaintiff. Is this position tenable % Legislation in this State has removed many of the disabilities of married women, under which they labored at common law; among other powers and abilities which they have by virtue of those provisions, is the right to take and hold property and enter into contract in relation thereto ; and where her contracts relate to, or are made for the benefit of her ■separate estate, they render her liable to an action for their enforcement. (Manhattan B. & M. Co. v. Thompson, 58 N. Y., 82.) And in such a case a common-law action may be maintained, and •an ordinary judgment for the recovery of money may be entered. (Corn.Exchange Ins. Co. v. Babcock, 42 N. Y., 613.)

This doctrine is not controverted by the appellant, but it is ■claimed in her behalf that as her portion of her father’s property was put in trust and beyond her control, she had no estate therein, .and as a consequence the contract made with the plaintiff had no relation to her separate estate and was not made for the benefit thereof. From such statement as we have of the facts on this subject, it must be assumed that the trust created by the will of the defendant’s father was an express trust, recognized by •our Revised Statutes, but of this position we cannot be certain, .as we have no copy of the will before us. Upon this assumption the following provision of the Revised Statutes is controlling: “Every express trust, valid as such in its creation, except as herein otherwise provided, shall vest the whole estate in the trustees in law and in equity, subject only to the execution of the trust. The person for whose benefit the trust is created shall take no estate or interest in the lands, but may enforce the performance of the trust in equity.” (2 R. S., 6 ed., 1109, § 73.) The exception noted in this section has no relation to this case.

Under this provision, it seems the defendant has certain rights in this property, which she may enforce in equity against the trustees, and has no estate therein. Noyes v. Blakeman (6 N. Y., 577), is a case similar to this, and it was there held that there could be no recovery for services by a lawyer employed to protect .and save property held in trust for the defendant. That case is decisive of this and is fatal to the recovery of the plaintiff.

The judgment must be reversed, and a new trial granted, with •costs to abide the event.

Gilbert, J., concurred ; Barnard, P. J., not sitting.

Judgment and order denying new trial reversed, and new trial granted, costs to abide event.


author: .Dykman, J.:

text:
    EMILY C. VAN VLIET, Respondent, v. JOHN McLEAN, Appellant.

      Action for false representations — fraudulent intent must be proved to authorize a-recovery.

    The plaintiff purchased of the defendant a mortgage, relying upon a statement made by the latter, that it was a first mortgage, and that the property-covered by it was worth $15,000. In fact, it was a second mortgage, and worthless. The defendant made the statement in good faith, believing it to be true. He did not intend, and refused to guaranty the payment of the mortgage.
    In an action brought by the plaintiff to recover the amount paid by her on the purchase of the mortgage, Held, that she was not entitled to recover.
    Appeal from a judgment in favor of the plaintiff, entered upon the trial of this action, by the court without a jury.
    The action was brought to recover the amount paid by the plaintiff to the defendant upon the purchase of a mortgage, upon, the ground that he had at the time of its purchase promised and warranted that the.mortgage was a first lien upon the premises covered by it, and that the property was worth $15,000. The mortgage was given to secure payment of the sum of $1,000. The court found, as matters of fact :

      “ I find that the defendant, as part of the transaction of sale, stated that the mortgage was a first mortgage upon property worth $15,000. That at that time it was not a first mortgage, but was a second mortgage, and the first mortgage covered all the lauds described in the mortgage in dispute, which on foreclosure sold for no more than the sum due ou the said first mortgage. That this mortgage was worthless at the time it was so purchased of the defendant. That McLean refused to guarantee the mortgage when called upon to make' the formal assignment; and the covenant to that effect in the assignment, therefore, was erased, bnt at the same time the defendant stated that it was a first mortgage. That there was no fraud. That McLean believed it was a first mortgage and a good mortgage, and did not intend to guarantee it. That plaintiff relied upon the statement that it was a first mortgage, and bought thereon, and paid $1,000 therefor.
    And, as conclusions of law, “that the statement that the mortgage was a first mortgage was a material statement, and by reason of it plaintiff bought. That the plaintiff is entitled to judgment for the mortgage, with interest, and without costs, amounting in all to $1,130.11.”

      Sackett & Smith, for the appellant.

      John Thompson, for the respondent.
   .Dykman, J.:

This action is for the recovery of the amount paid to the defendant by the plaintiff, on the assignment of a mortgage on real property.

The trial rvas before the judge without a jury, and his finding is that, as a part of the transaction, the defendant stated that the •mortgage was a first mortgage upon property worth $15,000. That it was not a first mortgage, and was worthless. That the defendant refused to guarantee the mortgage. That there was no fraud, and that the defendant believed it was a first mortgage and a good mortgage, and did not intent to guarantee it. That the plaintiff relied upon the statement that it was a first mortgage, and bought thereon. The conclusion of law is, that the statement was a material one, 'and the plaintiff bought by reason of it, and is entitled to judgment.

It is thus seen that the recovery is not permitted on a warranty for there was none. If it can be maintained therefore it must stand on the declaration of the defendant, that the mortgage was a first mortgage. The defendant so stated, and the statement was untrue, but is this sufficient to impose liability upon him. For a representation made without intent to deceive no action can be sustained. Intent to deceive must exist, with falsehood, before any legal liability is imposed. The case of Bennett v. Judson (21 N. Y., 238), was at one time supposed to have established a different rule in this State, and the language of the judge who delivered the opinion tends to such conclusion. That case has, however, been so explained and questioned by the Court of Appeals, that it cannot be permitted such effect. (Craig v. Ward, 3 Keyes, 393; Marsh v. Falker, 40 N. Y., 565 ; Meyer v. Amidon, 45 Id., 170 ; Oberlander v. Spiess, 45 Id., 175; Wakeman v. Dalley, 51 Id., 34.)

These cases all hold substantially, that, before a recovery can be permitted in this class of cases, there must be false representations and an intent to deceive, by stating what is known to be false, or by professing knowledge of the truth of a statement which is untrue. In this case, the representations of the defendant were untrue, and although made in positive terms yet they were made with no intent to deceive. The design to defraud the plaintiff is excluded from the transaction. The defendant believed what he said was true, and the language used was not calculated to produce the belief that he had personal knowledge of what he said. The subject was not one upon which he had personal knowledge, and his declaration imports no more than the expression of his candid belief. There was no positive expression of knowledge, and it was a subject upon which knowledge would naturally be possessed by but few. We think the findings of fact fatal to the conclusion of law. It is found that there was no warranty and no fraud, and that the defendant believed what he said to be true. The judgment, therefore, should have been for the defendant.

The judgment should be reversed, and a new trial granted, with costs to abide the event.

Gilbert, J., concurred; Barnard, P. J., not sitting.

Judgment reversed and new trial granted, costs to abide event.


text:
    HENRY B. SCHENCK and others, Appellants, v. JOHN P. O’NEILL, as Receiver, &c., Respondent, Impleaded with others.

      Consideration — what is a sufficient one to support a mortgage — when the mortgagor is estopped from disputing the validity of it, by a certificate given upon its assignment.

    In February, 1870, one Scbenck and others filed in the insurance department, a declaration for the organization of The Peabody Insurance Company, with the certificate of the attorney-general annexed. Schenck subscribed for seventy shares of the stock, and gave therefor three mortgages upon real estate owned by him, which were subsequently assigned by the company to the superintendent of the insurance department, accompanied by a certificate signed by Schenck, to the effect that there was due and to become due thereon the principal sum, with interest, and that there was no legal or equitable defense thereto. The Peabody Company being unable to raise the amount required by law to authorize it to commence business, consolidated with the Farmers’ and Mechanics’ Company, all the stockholders consenting thereto; one of the plaintiffs, the administrator of Schenck, signing the consent for the stock held by him. Thereafter the mortgages were assigned by the superintendent of the insurance department to the Farmers’ and Mechanics’ Company, and thereafter by various mesne conveyances they came into the hands of the defendant.
    In an action by the plaintiffs, the heirs of Schenck, to have the mortgages canceled on the ground of the failure of the consideration upon which they were given, Held, that they were founded upon a valuable consideration, and that there had been no failure thereof.
    That even if there had been a failure of the consideration, Schenck, and the plaintiff, as his administrator, would have been estopped from alleging it by the certificate given by him upon the first assignment of the mortgage.
    Appeal from a judgment in favor of the defendant, entered upon the trial of this action, by the court at Special Term. The ■action was brought to obtain a decree canceling three mortgages made by the ancestor of the plaintiffs on the ground of a failure of consideration.

      Henry J. Schenck, for the appellants

      Edgar M. Cullen, for the respondent.
   Dykman, J.:

In the administration of precautionary or protective justice courts of equity entertain jurisdiction of actions for delivery up of written instruments because a party has fears of future injury from, their vexatious use, when evidence to impeach them is lost; and such actions may be maintained even where the party seeking relief has a defense in law or equity against the instrument of which he seeks cancellation. (McHenry v. Hazard, 45 N. Y., 581.) The foundation of the action, however, must always be accident, mistake or fraud, or the instrument must be held for unconscientious purposes.

This action seeks the surrender of three bonds and mortgages, on the ground of failure of consideration, which brings it under the last-named head. It is true, an attempt was made on' the trial to show that the mortgages were improperly put afloat, but it was not successful, and the trial judge has not sustained the position.

In the month of February, 1870, measures were taken for the organization of an incorporated company, for insurance of individual lives, and among the actors in the scheme was John B. Schenck, the ancestor of the plaintiffs. The name was to be the Peabody Insurance Company, and its organization was completed so far as filing the declaration and charter, and the certificate of the attorney-general thereto was concerned. . •

Three persons were apppointed commissioners to open books for subscriptions to the capital stock of the company, and in June, 1870, John B. Schenck subscribed for seventy shares of the stock, and in payment thereof executed and delivered to the three commissioners the three bonds and mortgages in question here. He died in August, 1870, and the lands covered by the mortgages came to the plaintiffs by descent, and they desire their cancellation because they are a cloud, on their title.

The stock of the company was not taken, and the deposit necessary to authorize the transaction of business was not made with the insurance department at Albany.

Thereafter the Peabody Company became virtually consolidated with the Farmers’ and Mechanics’ Insurance Company, the consent thereto being signed by all the stockholders of the Peabody Company. The plaintiff, W. T. Y. Schenck, signing as administrator of tho estate of his father John B. Schenck, who was then dead, the stock being held by the administrators. This was September 22, 1870, and the Peabody Company then had over $10,000 in money, and some three hundred applications for policies which had not been issued. All of which was turned over to the new company, with the office furniture, books and stationery.

On June 13, 1870, these mortgages were assigned by the Peabody Company to George ~W. Miller, the superintendent of the insmance department, and indorsed’upon the assignments was a certificate signed by John B. Schenck, the mortgagor, to the effect that he consents to the assignment; that there is due and unpaid and to become due and unpaid the principal sum with interest, and that there is no offset to, or legal or equitable defense against the same.

On October 23, 1870, Miller, the superintendent, reassigned these bonds and mortgages to the Peabody Company, and on October 28, 1870, the Peabody Company assigned them to the Farmers’ and Mechanics’ Company, and that company on the same day assigned them to superintendent Miller, who received them as security under the statute, for the policy-holders of the Farmers’ Company. The Farmers’ and Mechanics’ Company afterwards became insolvent, and the receiver by direction of the court, transferred these mortgages to the Empire Company, and they subsequently passed to the Continental Company, of which the defendant O’Neill, is the receiver.

It is thus seen that these bonds and mortgages were executed and delivered for a valuable consideration, and that therein there was neither accident, fraud nor mistake. It also appears that they have come to the Continental Life Insurance Company by regular assignments, and in regular course of business. The plaintiffs have not, therefore, shown any infirmity in the title' to these securities.

These plaintiffs can have no more advantageous relation to the original transaction than their ancestor. He gave these mortgages for a valuable consideration in the expectation of their being permanently deposited as security for policy-holders when the requisite amount was made up, and the fact that such amount never was realized certainly gave him no right to their cancellation.

The company was a corporation de facto, and whatever remedy he had after its failure to qualify itself for business did not lie in such an action. The company might have been dissolved by proper proceedings instituted for that purpose, but instead of adopting that course a consolidation with another company was arranged by an agreement signed by all the stockholders of the Peabody Company.

The seventy shares of stock, for which these mortgages were given, were voted on by the administrator of the estate by whom they were held. These mortgages, with all other property, went to the new company in pursuance of the agreement, and these plaintiffs cannot now object to such disposition.

Moreover the plaintiffs are now estopped fi-om imputing invalidity to these mortgages by the certificate made by the mortgagor at the time of their transfer to the superintendent of insurance. That certificate contains all the elements of an estoppel m jpaÁs, and as the mortgagor was precluded from contradicting it in his lifetime, so now the plaintiffs are debarred from such contradiction.

It remains to notice an objection to the defendants’ téstimony. The original proposition from the Farmers’ Company for a consolidation and its acceptance by the Peabody Company could not be produced, and after the former president of the latter company had testified that he could not tell where the agreement was or where it could be found, a book was shown him which he said contained exactly the agreement, and then-the book from page seventy-three to seventy-nine was offered in evidence. It was objected that the proper foundation had not been laid for secondary evidence, and that the testimony was immaterial.

It must be remembered that the Farmers’ Company went to a receiver ; that all the papers then ceased to be of any value, and that nine years have elapsed since that time. This makes slight proof of loss sufficient to let in the testimony (Jackson v. Root, 18 Johns., 73), and we think the testimony was properly admitted.

In relation to the objection to the book commencing on page seventy-nine, it is sufficient to say that it does not appear that those pages were offered or read. The judgment must be affirmed, with costs.

Gilbert, J., concurred; Barnard, P. J., not sitting.

Judgment affirmed, with costs.


author: Gilbert, J.:

text:
    ELIZABETH A. DENIKE and CHARLES W. DENIKE, Respondents, v. CHARLES J. HARRIS and ROBERT C. REEVES, Executors, &c., of ABRAHAM DENIKE, Deceased, Appellants.

      Will — construction of a clause in — when the cou/rt will compel executors to take seewrity for a loan, made in pursuance Of a direction contained in the will.

    A testator, who, at the time of his death, was a special partner of a firm of which one Reeves, one of his executors, was the general partner, left a will by which he directed his executors “to allow my friend, Robert C. Reeves, to retain, as a loan to him out of my personal estate, the sum of $15,000, • being the amount now invested by me in the business carried on and conducted by him, and in which I am a special partner, to be used and employed by him in carrying on and conducting the said business, and to be continued from year to year, at the option of the said Robert C. Reeves, but not to exceed the term of three years, upon his paying the interest thereon annually at the rate of five per cent, per annum. Such income, when received by my said executors, to be from time to time paid over to my residuary legatees, and at the expiration of said term, or sooner determination thereof, at his option as aforesaid, I direct my said executors to receive from the said Robert C. Reeves the said sum of money and interest, and to discharge him fully from all further liability on account or by reason of such indebtedness, and upon such payment being made to my said executors, the said sum of $15,000 is to become a part of my residuary estate, and to be distributed according to the provisions of this, my will, with respect thereto.”

      Held, that this clause did not operate to-,give to Reeves an option to purchase the interest of the testator in the partnership at $15,000, with a credit of three years for the payment of the purchase-price, but amounted to a loan of that sum to him for three years at the interest specified, and that the court had power, upon the application of the residuary legatees, to require security to be given by him for the repayment thereof to the exec-, utors.
    Appeal from a judgment in favor of the plaintiffs, entered upon the trial of this action by the court, without a jury.
    This action was brought to compel the executors of the last will and testament of Abraham Denike, deceased, to require security for a loan directed to be made in tbe said will by them. The comnplaint alleged, among other things, the making of the will, of the said deceased, its admission to probate, and the appointment of the said executors; and set out in full the clauses of the will under consideration as to the loan to Reeves, with whom deceased was a special partner; and that the business of the said Reeves was one of risk.
    That the balance-sheet on January 1, 1879, made by Reeves, showed the testator’s interest to be $17,908, and that the same interest of the testator was in the inventory apj>raised at $14,000. That the said executors propose and intend to loan the said sum of $15,000 mentioned in the said will to the said Reeves, without taking security therefor for its faithful return at the end of three years; and if so made to the said Reeves, he proposes to use the said sum in business; and if loaned and used in business it will be at great risk, and in' a short time be lost, wasted, destroyed or otherwise impaired. That the executors have little or no property. That the plaintiffs demanded of the said executors to take security, but they refused.
    The judgment directed:
    “ First. That the said defendants, as executors, shall require and obtain from said Robert C. Reeves sufficient and proper security for the safe payment and return of the fund in the hands of said Reeves belonging to said deceased, or which his said estate is entitled to for the interest of said deceased in said special partnership, for the safe return of said fund to the executors of said estate at the end or termination of the three years mentioned in the clause of said will in reference thereto; and in case the said Reeves shall fail to give such security, then that said executors immediately collect and receive into their hands and possession the amount due said estate from said Robert C. Reeves and the executors thereof, for the interest of said decedent in such special partnership, and that the money resulting from such collection be by the executors invested, so that the same may be preserved for the benefit of said residuary legatees, as directed and provided in and by said will in reference thereto; that any net income arising from such investment over and above an interest at tbe rate of five per cent, per annum be paid to said Reeves, for the term of bis interest therein, as provided by said will; or bring said sum into court.
    “ Second. And that tbe said Reeves be and hereby is perpetually •enjoined and restrained from in any wise jeopardizing tbe money or property in bis bands as surviving partner of tbe special partnership of said Robert C. Reeves, and from investing or using tbe .same in any business, or treating or using tbe same other than an ■asset of tbe estate of said Abraham Denike, deceased, to be collected and received into tbe bands of tbe executors thereof, in their trust capacity, or be secured as above demanded.”

      S. P. Hash, for tbe appellants.

      Homer A. Helson, for -the respondents.
    It is tbe duty of tbe trustee to protect the estate of tbe remaindermen against tbe act of tbe tenant for life or a shorter period, by preventing him from -doing any act which is an injury to reversion. (Langston v. Ottmant, Coop., 33; Stuart v. Stuart, 3 Beav., 430; Pechel v. Fowler, 2 Anst., 550; Mortloek v. Butter, 10 Yes., 308, 309; Lord Mahon v. Earl Stanhope, 2 Sug. Pow., 512 ; Oowgill v. Lord Ormintoun, 3 Y. & C., 369; Watts v. Gridleston, 6 Beav.; 188 ; Moseley v. Marshall, 22 N. Y., 200 ; Briggs v. Earl, &c., 19 Jur., '817; Freeman v. Cook, 6 Ired. Eq., 376; Woodman v. Good, 6 "W- & S., 169 ; Whitfield v. Bennet, 2 P. ¥ms., 242; Marker v. Marker, 9 Hare, 1; Baris v. Lee, 6 Yes., 786 ; Swan v. Leigan, 1 McCord Ch., 227; Boswell v. Morehed, 1 Bust. Eq., 26 ; Frazer’s Admr. v. Bwill, 11 Gratt., 9; Foley v. Burnett, 1 Bro. •C. C., 279 ; Woods v. Sullivan, 1 Swan, 507 ; Wootton v. Burch, 2 Md. Ch., 190; Smith v. Ostrander, 64 N. Y., 278; Tyson v. Blake, 22 Id., 563; Lenpton v. Lenpton, 2 Johns., 628 ; Clark v. Clark, 8 Paige Ch., 160 ; James v. Scott, Ala., 579 ; Emmons v. Cairns, 2 Sandf. Ob., 369 ; Van Buyne v. Vreeland, 1 Bresl. (N. J.), 142; Willard Eq. Jur., 328-330 ; Ferrance v. Prentice, Ambler, 273 ; Walker v. Cook, cited by Lord Thurlow in 1 Bro. C. O., 105 ; Green v. Pigott, 1 Bro. C. Q,, 105; Henderson v. Vaults,
      10 Yerger, 30 ; Johnson v. Mills, 1 Yes. Sen., 282; Willard Eq. Jur., 330, 331; Smith v. Ostrander, 64 N. Y., 281.)
   Gilbert, J.:

The defendant, Reeves, is the surviving member of a special-partnership in which the testator was the special partner, and Reeves was the general partner. The business of the partnership was-the sale of agricultural implements. The question on which the case depends arises upon the following provision of the testator’swill, viz.:

10th. It is my will, and I do hereby order and direct my executors hereinafter named, to allow my friend, Robert O. Reeves, to retain, as a loan to him out of my personal estate, the sum of $15,000, being the amount now invested by me in the business carried on and condncted by him, and in which I am a special partner; to be used and employed by him in carrying on and conducting the-said business, and to be continued from year to year at the option of the said Robert O. Reeves, but not to exceed the term of three-years, upon his paying the interest thereon annually at the rate of five per cent, per annum. Such income, when received by my said executors to be from time to time paid over to my residuary legatees ; and at the expiration of said term, or the sooner determination thereof, at his option as aforesaid, I direct my said executors to receive from the said Robert O. Reeves the said sum of money ana interest, and to discharge him full/y from all further liability on-account or by reason of such indebtedness / and upon such payment being made to my said executors, the said sum of $15,000 is-to become a part of my residuary estate, and to be distributed according to the provisions of this, my will, with respect thereto.”

It is claimed on behalf of Reeves that the gift was an option to-purchase the testator’s share of the effects of the partnership at $15,000, and also to have credit for the payment of the purchase-money, not exceeding three years. We think the language employed does not admit of that construction. In the first place, the-direction is that the executors allow Reeves, who is one of them, to retain as a loan to him out of the testator’s personal estate, not out of his share of the partnership effects exclusively, the sum of $15,000. It appears that the testator’s personal estate exceeded. $140,000,»while his interest in, the partnership was estimated by the executors in the inventory, returned by them, at only the sum of $14,000. The direction, then, is to loan money, not to sell property. The source of the loan is to be the testator’s personal estate generally, not any particular part thereof. Second. Reeves was given the option of retaining $15,000 as a loan. That means that he was to be permitted to keep as a borrower, money which, but for the direction in the will, he would have been bound to pay over to the legatees. The direction to discharge him from such indebtedness ” on payment of the sum retained as a loan refers to the debt incurred by him as a borrower, and not that which might accrue from his liability as surviving partner. The previous statement of the testator, of the amount invested by him in the partnership, was. ■not intended to conclude his personal representatives as to the actual value of his interest in the partnership at the time of his death.

Reeves, no doubt, is entitled to wind up the partnership. In that respect he holds the partnership property and effects in trust to pay the partnership debts, and to pay over the testator’s share of the surplus (if any), that may arise to the personal representatives of the testator. (Egberts v. Wood, 3 Paige, 517 ; Wilder v. Keeler, Id., 166.) The judgment does not interfere with his rights or duties in the administration of that trust. The j’udgment, it is true, directs that in case of a failure,by Reeves to give security for the sum loaned, pursuant to the tenth clause of the will, the executors shall collect the amount due from him to the estate. The obj'ect of this was to establish the liability of the executors. If they have used money in hand to make the loan, they must get it back, and whenever any sum shall become due to the executors from Reeves as surviving partner, they must not permit him to retain it without security, but must immediately collect it, &c. Such is the proper interpretation of the j'udgment.

"We are of opinion, that executors are not authorized to loan the money of the estate which they represent, without security, under circumstances where a person of ordinary prudence would exact security for the loan, and that as to such transactions they stand on the same footing as ordinary trustees. They are quasi trustees in investing the funds of the estate, and the liability of trustees attaches to them. "When they threaten to violate the rule thus stated, upon a mistaken construction of the testator’s will, a court of equity may, and ought to, restrain them. (Wms. Ex’rs., 1809 ; King v. Talbot, 40 N. Y., 76, 88.)

The gift to Reeves, in substance, was one of the use of a fund for a term, with remainder to legatees. "Whether treated as a loan or as a bequest, however, the power and duty of the court to require security to be given for the protection of the ultimate beneficiaries seems to us to be equally clear. (Story Eq. Jur., §§ 845, 845, a; Vernon v. Vernon, 53 N. Y., 356-363.)

The judgment must be affirmed, with costs.

Dykman, J., concurred ; Barnard, P. J"., not sitting.

Judgment affirmed,-with costs.


text:
    SAMUEL T. TATE, Respondent, v. JAMES J. McCORMICK, Appellant.

      Liability of tike assignee of a lease for rent accruing after the assignment — Oode of Ovdl Procedure, § 999 — motion for a new triad thereunder.

    Although the continued possession of the demised premises by an assignee of a lease, after he has assigned the same, may be evidence of fraud, and tend to show that the assignment was merely colorable or fictitious, yet that fact standing alone is not sufficient to establish the invalidity of the assignment, or render such assignee liable for rent thereafter accruing.
    Under section 999 of the Oode of Civil Procedure, a party may move for a new trial, on the ground that the verdict is contrary to law, and upon an appeal from an order denying such a motion the whole case is before the appellate court, upon the law as well as the facts.
    Appeal by the defendant from a judgment of the County Court of Kings county, entered on a verdict in favor of the plaintifE; and from an order of the said County Court denying a motion for a new trial, made upon the minutes.

      The plaintiff is the owner of six lots of ground on Gates avenue, between Tompkins and Throop avenues, in the city of Brooklyn, forming part of what is known as Lefferts’ Park. On February 24, 1877, the plaintiff leased those six lots to one Hyde, who thereafter, and on February 24, 1877, assigned his lease to the defendant, who thereupon went into possession of the premises.
    About February 24, 1878, the defendant claimed to have assigned the Hyde lease to one Gourlay, and served a notice to that effect on the plaintiff, who thereupon caused to be served on the defendant a notice that he would not recognize any assignment, but would continue to hold him on the lease. The plaintiff’s evidence tended to show that after the assignment to Gourlay the defendant continued to use the whole park in the same way in which he had used it before such assignment. This action was brought to recover the installments of rent, payable under the lease, on August 1 and September 1, 1878, and on May, June, July, August and September 1, 1879.
    The county judge submitted the case to the jury on the single question, “Did McCormick, after he assigned this lease, continue in possession of the particular premises described by that lease? If he did he is liable ; if he did not he is not liable. That is all there is for you to decide.”

      John H. Bergen, for the appellant.
    The lessee, after assignment, still remains liable upon all his covenants to the lessor, by reason of his privity of contract, and the assignee of the lessee will be hable to the lessor upon such covenants only while he remains a tenant. He may reheve himself of responsibility by assignment •over to another. {Post v. Jackson, 17 Johns., 239; Carter v. Uammet, 18 Barb., 108; Yam, Schcvick v. Thi/rd Avenue P. P. Co., 30 Barb., 189; Id., 409, ■ and affirmed, 38 N. Y., 346; Bteppain v. Richards, 1 Hilt., 509; Siefke v. Koch, 31 How. Pr., 383; Ca/rter v. Uammet, 18 Barb., 108; Childs v. Cla/rk, 3 Barb. Ch., 52; 38 N. Y., 346; 30 Barb., 189; 18 Barb., 608; Gerard on Titles, 184; Polph v. White, 12 N. Y., 296.)

      J. Stewa/rt Poss, for the respondent.
    The assignee of a lease is; only liable as such assignee for the rent which accrued or became payable, or for other covenants broken while he was such assignee, and may discharge himself from all further liability by assigning-his interest in the premises to a stranger, even if the assignee is a beggar, provided he actually relinquishes the possession of the-premises, and all interest therein, so that the assignment is not merely colorable or fraudulent. (Ohilds v. Hull, 3 Barb. Ch., 60 Qm-ter v. Hammet, 18 Barb., 611; Holsmam, v. De Gray, 6 Abb, Pr., 79-82; Astor v. Lamoreux, 4 Sandf., 527.)
   Gilbert, J.:

This action was brought to recover rent which had accrued upon: a lease between the plaintiff as lessor, and one ITyde as lessee. The lease bears date February 24, 1877, and demised a part of premises, known as Lefferts’ Park for a term of three years. On the same, day the lease was made, Hyde assigned it to the defendant. On February 23, 1878, the defendant assigned the lease to one Gourlay.. A recovery was had for rent which fell due after the latter-assignment was made. The case contains no exceptions. A. motion was made for a new trial, and denied, and this appeal is. from the order denying a new trial as well as from the judgment. Such a motion may now be made upon exceptions, or because the verdict is contrary to law. (Code of Oiv. Pro., § 999.) An appeal may be taken from an order made by a County Court, which affects a substantial right. (Id., § 1342.) Has a party then a right to-have a verdict set aside which is contrary to law ? If he has, the whole case is before us for review, upon the law as well as the facts. "We think he has such right, for the reason that the power to set aside a verdict was given for the promotion of justice. Therefore, suitors have a right to insist on the exercise of the power in a proper case. (MacDougall v. Paterson, 11 C. B., 772 Mayor v. Furze, 3 Hill, 612.)

We are of opinion also, that the verdict in this case is contrary-law. An assignee of a lease may always discharge himself from liability for subsequent "breaches of the covenant to pay rent by assigning over. Privity of estate is the sole foundation of the assignee’s liability. It follows, therefore, that an actual assignment by such assignee of his interest to another, determines the privity of estate between him and the reversioners. A merely colorable •or fictitious assignment of a lease, which does not accomplish an actual transfer of the interest of the assignor in the demised premises, but leaves him in the rightful possession and enjoyment thereof, is a nullity. But if the assignment be absolute and valid, it operates at once to transfer the interest of the assignor, and that interest includes the possession of the demised premises. It is not •necessary to the completion of the transfer, that the second assignee .-should make an actual entry into possession of the demised premises. In contenrplation of law, possession follows the deed. The possession of an assignor after he has made an assignment may be .a badge of fraud, but in the absence of evidence that the assignment was ineffectual to accomplish the transfer which it purported to make, such continued possession by the assignor does not destroy its legal effect. Nor is it material that the assignment was made solely for the purpose of ridding the assignor of the charge. He may assign to one who cannot be sued, to a beggar, or to one to whom he has given a bonus to accept the assignment. Such facts •do not impeach the validity of an assignment. Nor does mere possession without right. The authorities on this subject are .numerous and accordant. (2 Platt on Leases, 416, et seq.; Tayl. Land. & Ten., § 452; Wash. R. P., bk. 2, ch. 1, § 1, ¶¶ 15, 16, and cases therein cited.) The cases cited by the respondent’s counsel do not conflict with the rule stated. In Carter v. Hammett (18 Barb., 608), the defendants had judgment on the ground that they were not assignees of the lease. In Holsman v. De Gray (6 Abb. Pr., 79), the plaintiff recovered because the defendant was in the •occupation of the demised premises under an assignment of the lease: In Astor v. Lamoreaux (4 Sandf., 524), the Superior Court merely decided that the equitable owner of a lease, in actual possession of the demised premises, was liable as assignee thereof. This ease was reversed by the Court of Appeals (4 Seld., 107), but without any discussion of the merits involved in it.

No evidence was given upon the trial for the purpose of showing, ■or which justified the inference, that the assignment to Gourlay was invalid. Nor was the question whether the assignment was-fraudulent, or colorable, or fictitious, considered by the court or by the jury. Some evidence was given tending to show that the defendant had claimed some benefit from the use of the premises by others, while Gourlay was the nominal assignee of the lease. But in our judgment the evidence wás insufficient to show that Gourlay was not a real assignee of the lease. The verdict rests exclusively upon the fact that the defendant continued in possession of the demised premises after the assignment to Gourlay. But the fact of possession alone is not sufficient to impose liability upon an assignee of a lease, for rent which accrued either after he had assigned over, or before the assignment to him, for the reason that, mere possession without title creates no privity. Such possession may be under a license, or that of a tenant by sufferance, or 'of a trepasser, out of neither of which can privity of estate with the reversioner arise.

We should have much hesitation in sustaining the verdict upon the evidence on which it was founded, even if the rule of law laid down had been correct. But as there must be a new trial for the other reasons stated, it is needless, and, perhaps, improper to discuss that evidence.

Judgment and order denying a new trial reversed and a new trial granted, with costs to abide the event.

Dykman, J., concurred; Barnard, P. J., dissented.

Judgment and order denying new trial reversed, and new trial granted; costs to abide event.


text:
    J. BYINGTON SMITH, as Executor, &c., of HARVEY EDWARDS, Deceased, Appellant and Respondent, v. ELIZA H. EDWARDS and others, Appellants and Respondents.

      Will — when a bequest does not invobe an unlawful suspension of the absolute ownership of personal property — What directions for the accumulation of income an'e unlawful — When a legacy does not vest until the time for distribution has arrived— The claim of a receiver to the share of a legatee, cannot be determined in an action for the construction of a will.

    A testator by Ms will gave and bequeathed ‘ ‘ to each and every grandchild (if any) that may be hereafter born within twenty years after my death, and before the final settlement of my estate, the sum of $1,000, . . to be paid to each on their severally arriving at full age, or if granddaughters on their sooner being lawfully married.” The testator left him surviving two sons, three daughters, and four grandchildren by a son who died after the testator.

      Held, that there was no unlawful suspension created by the will of the absolute ownership of the property; that the legacies to the grandchildren living at the testator’s death vested immediately, and that as to those who might thereafter be born, the absolute ownership could not possibly be suspended beyond one life in being at the death of the testator, namely, that of the parent, who was a child of the testator.
    The testator further directed that $30,000 which he had invested in United States bonds be “kept invested until my youngest grandchild, now born, or that may hereafter be born before the final distribution of my estate, shall be of full and lawful age,” and that his executor should, out of the income thereof, pay for repairs to 'stones in a cemetery lot, and make up any deficiencies in the funds provided for the payment of legacies, and that they might from time to time, after five years from the time of his death, make division and distribution of any surplus that might then be in their hands, and also, if they should see fit at the same time, divide and distribute $10,000 of said principal and bonds, thus invested, between his children and grandchildren, and that the remaining $20,000 should be divided among them when tlie youngest grandchild, born, and that might within twenty years be born, should arrive at full age, or, if a granddaughter, should sooner be lawfully married.

      Held, that the clause involved a violation of the statute against the accumulation of income, and of the statute against the suspension of the absolute ownership of personal property, and that, as the part which was good could not be separated from that which was bad, that the whole must be rejected.
    Wbero a bequest of personal property contains no express words of gift, but the gift arises by implication, from a clause directing the fund to be divided among persons named, such clause is also evidence of an intent that the gift is not to vest in interest until the time for distribution has arrived.

      An action to obtain the construction of a will is not a proper one in which to determine the claim of a receiver, appointed in proceedings supplementary to execution, issued upon a judgment recovered against one of the legatees, since deceased, to the share of the judgment debtor in the estate.
    Appeal from a judgment entered upon the trial at Special Term of this action, brought for the construction of a will.
    Harvey Edwards, the testator, died November 30, 1868, leaving a large real and personal estate, of which $30,000 was invested in United States bonds. By his last will, made October 31, 1868, he appointed the plaintiff, J. Byington Smith, Eliza H. Edwards, Howard IT. Edwards and Thomas C. Edwards, executors of his estate, but directed the same should be managed by the executor, Smith, who has since managed the same. The testator left him surviving his wife Eliza, his sons Howard and Thomas C., and his daughters Marion, Elizabeth and Julia, and the following granddaughters, all of whom were children of Thomas C. Edwards, viz.: Florence, Alice, Clara and Louisa Edwards. All of these grandchildren were minors at the death of the testator. The youngest, Louisa 11. Edwards, is still a minor about eighteen years of age. At the time of the testator’s death, his daughters Marion and Elizabeth, and his son Thomas, were married. His daughter Julia was then insane, and remained so until her death. Thomas C. Edwards and Julia Edwards died subsequent to the death of the testator, Thomas surviving his sister.
    During the lifetime of Thomas C. Edwards, both before and after the death of Julia, the appellant, Gabriel W. Wisner, was duly appointed receiver of all the property of Thomas C. Edwards, in proceedings supplementary to execution, and duly qualified as such receiver.
    Since the death of the testator, only one grandchild has been born, being a child of his daughter Elizabeth, and this grandchild has since died.
    The ninth and sixteenth clauses of the will read as follows :
    “ Wwith. I give and bequeath to each and every grandchild (if any) that may be hereafter born within twenty years after my death and before the final settlement of my estate, the sum of one thousand dollars; and request that all of my children may con,-sent to and acquiesce in this, the same as though such grandchild or children were now born and living ; said one thousand dollars to be paid unto each on their severally arriving at full age, or, if granddaughters, on their sooner being lawfully married.

      “ Sixteenth. I have thirty thousand dollars invested in United ■States registered bonds, which I order and direct to have kept invested until my youngest grandchild now bom, or that may hereafter be born, before final distribution of my estate, shall be of full ¿and lawful age ; and that my executors, out of the interest and net increase thereof, keep up and in good order and condition, all ¿stones, railings, &c., in and about the Edwards lot in the Fayetteville ■Cemetery, replacing any stones that may be broken, and repairing .said railings, &c., as from time to time it may become necessary; -■and that they may make up out of said increase and interest, any •deficiency there may be in funds to pay legacies, and meet the •other provisions of this will; and may, from time to time, after ■five years from the time of my death, make division and distribution of any surplus that may then be in their hands ; and also, if ■they see fit, at the same time, divide and*distribute ten thousand ■dollars of said principal and bonds thus invested, all between my four children, Thomas 0., Marion E., Elizabeth E. and Howard IT., and my aforesaid grandchildren, Alice M., Florence E., Clara E. and Louisa R., in the proportion of my aforesaid legacies and bequests ¿severally, to them ; my said daughter Julia P. also to be included in such division, and in proportion of her aforesaid legacy, if she shall before such division become rational; and may thereafter from time to time make division and distribution of other interest and increase between said children and grandchildren in the same proportion ; and if either shall die before payment, leaving issue, then his or her aforesaid legacies and portion to his or her •children; but if either shall die without issue and before payment, then his or her legacy and portion to the surviving brothers and ■■sisters.
    “ And when my youngest grandchild, born, and that may within twenty years be born, shall arrive at full age, or, if a granddaughter, shall sooner be lawfully married, my executors shall •divide the remaining twenty thousand dollars (now in such bonds), and such increase as they may then have, into two equal parts and shall divide one moiety or half thereof equally between my four children, Thomas C., Marion E., Elizabeth E. and Howard II., or into .five parts, so as to include my daughter Julia P., should she become rational; and shall divide the other moiety or half' equally between all of my grandchildren who may then be living, including such as may be hereafter born; and if any child or grandchild shall die before such division or distribution, then his or her share to his or her children; but if without issue, then to his or her brothers and sisters; but in all cases the share or portion of any one under age shall be kept invested and on interest until he or she shall arrive at full age, or be as aforesaid lawfully married.”
    The court below held both these clauses void and incapable of execution as they read, upon the grounds that they suspended the alienation of the property for more than two lives in being, but held the will might take effect and be construed as follows: That the whole fund of $30,000 at the death of the testator became vested in his children and grandchildren living- at his death and born during the minority of the youngest grandchild living at his death. That the alienation of the fund was not suspended beyond the period of two lives in being, but that the distribution of the fund was illegally postponed beyond that period. That the said illegal postponement of payment might be dropped in part, and $10,000 of the fund divided among the legatees mentioned, after five years from the decease of the testator and during the minority of the youngest grandchild living at his death ; $10,000 among the children named, at the expiration of the minority of the youngest grandchild living at the testator’s death; and $10,000' among the grandchildren living at the expiration of the minority of the youngest grandchild living at the testator’s death. That the share of the only grandchild born since the death of the testator, in this last $10,000, vested at her birth, and passed to her representatives upon her decease. That each grandchild born after the testator’s decease and during the minority of the youngest grandchild living at his death, -was entitled to a legacy of $1,000 under the ninth clause of the will.

      E. Wells, for the plaintiff.

      Kennedy <& Tracy, for G. W. Wisner and H. Howard Edwards, defendants and appellants.

      K. B. Smith, for the defendant, Florence Garrison, defendant and appellant.

      J. A. Williams, for Louisa R. Edwards, defendant and appellant.
   Gilbert, J.:

The Revised Statutes prohibit any suspension of the absolute ownership of personal property for a longer period than during the continuance and until the termination of not more than two lives in being at the death of the testator. In all other respects, limitations of future or contingent interests in personal property are subject to the rules prescribed by the same statutes in relation to future estates in lands. (1 R. S., 773, §§ 1, 2.)

One of those rules is that a future estate may be limited to commence in possession at a future day, without the intervention of a precedent estate, and upon a contingency respecting the persons to whom, or the event upon which it is limited to take effect. (1 R. S., 723, §§ 10, 13.) Applying these rules, the bequests to grandchildren, contained in the ninth clause of the will, are valid. All those legacies are present gifts of separate and distinct protions of the testator’s- property, and all of them must necessarily take effect completely within the period of one life in being at the death of the testator. The legacies to the grandchildren m esse, vested immediately upon the death of the testator. That to the grandchild who was born after the death of the testator vested immediately upon her birth, and if any grandchildren shall be hereafter bom, the legacies to them will vest in like manner. As to the grandchildren who were living when the testator died, there was not a moment’s suspension of the absolute ownership of the money given to them respectively, and as to the others, the suspension could not possibly last beyond one life in being, namely, that of the parent who was a child of the testator. It is true that the offspring of a son of the testator might not be born until months after the death of its father. Still, the gift would be valid for two reasons. 1. It was dejiendent only upon the life of the father. 2. A child en ventre sa Tnere must be treated as having been living at the death of its father. (1 R. S., 725, § 30 ; Mason v. Jones, 2 Barb., 252.)

It is not quite so easy to determine the legal effect of the sixteenth clause of the will. It is very evident that the testator intended to dispose of all his property. He had, by previous provisions of his will, disposed of all of it, excepting the sum of $30,000, and in this clause he attempted to dispose of that fund.

It is quite apparent, however, that the intention of the testator expressed in this clause could not be legally carried into effect, for to do so would involve a violation of the statute against accumulations of income, except for the benefit of minors during their minority, and of the statute against a suspension of the absolute ownership of personal property beyond the prescribed period. Nor can we separate the good from the bad, as has been done in several cases. Bor the gift is an entire one to classes of children and grandchildren. (Knox v. Jones, 47 N. Y., 390.) Indeed, the sixteenth clause contains no gift in express words, but the gift arises by implication only, from the direction to divide. Such a direction, no doubt, is evidence of a gift of the property to be divided, but it is also evidence that the gift was n'ot intended to vest in interest before the division. The rule, as stated by Jarman (ch. 25, vol. 2, p. 457, 5 Am. ed.), is that where the only gift is in the direction to pay or distribute at a future age, the case is not to be ranked with those in which the payment or distribution only is deferred, but is one in which time is of the essence of the gift. (See also Leake v. Robinson, 2 Mer., 363-384; Leeming v. Sheratt, 2 Hare, 14, 22; 2 Redf. on Wills, 631.) No doubt a residuary gift should, if possible, be so construed as to vest at the death of the testator. But where the testator has embodied his gift in a direction to divide at a future time, surely there would seem to be no basis for such construction. The testator fixed the time for such division, namely, of part in five years after his death, and of the residue upon the coming of áge of his youngest grandchild, born within twenty years after his death. Such a gift is void, for the postponement of the .vesting is not dependent upon lives, but upon a fixed term of years. Future estates in personal property may be created, and the absolute ownership thereof may be suspended until the time for vesting arrives, but they must be limited by lives, and not by a term of years, however short. (Hone v. Van Schaick, 20 Wend., 564; Converse v. Kellogg, 7 Barb., 590; Rose v. Rose, 4 Abb. App. Dec., 108; Schettler v. Smith, 41 N. Y., 328.)

The. result is that in respect to the property mentioned in the sixteenth clause of the will, intestacy has happened, and such property has descended to the testator’s next of kin.

The share given to the testator’s daughter Julia, by the fifth clause of his will, upon her death intestate, sank into the residuum and descended to the testator’s next of kin.

We are of opinion, that this is not a proper action to determine the claim of the defendant Wisner to the share of the testator’s son Thomas. But assuming that it is, we think that the court below correctly decided, that the personal representatives of the testator are entitled to administration of his estate, and that the claim of Wisner, if a valid one, must be enforced by an appropriate proceeding against them in the course of that administration. Won constat it might in such a proceeding be shown, that other and prior equitable liens on fhe property of the testator’s son Thomas, are outstanding. We are sustained in this conclusion by adjudged cases. [Sylvester v. Reed, 3 Edw. Ch., 296; Mathews v. Neilson, Id., 346. See also High on Rec., § 716.) The remarks of Grover, J., in his dissenting opinion in Brown v. Nichols (42 N. Y., 42), have not the weight of authority.

The judgment should be modified in accordance with this opinion, and as so modified it should be affirmed, with costs to all the parties to this appeal, except the defendant Wisner, to be paid out of the fund.

Dykman, J., concurred; Barnard; P. J., not sitting.

Judgment modified in accordance with opinion of Gilbert, J., and order to be settled by him, and modified, with costs out of fund to all parties except Wisner, receiver.


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    CHRISTIAN W. H. SCHROETER, Appellant, v. FREDERICKS SCHROETER, Respondent.

      Mat/rimonial actions — power of the court on an application for judgment on the report of a referee — Oode of Oivil Procedu/re, § 1229 — Rule No. 83.
    Upon the hearing of a motion for leave to enter judgment upon the report of a referee, appointed to hear and determine the issues in an action for divorce, on the ground of adultery, the court cannot set aside the report, on the ground that the evidence is insufficient to sustain the findings, and direct a judgment to be entered in. favor of the party against whom the referee awarded a judgment.
    The legislature, by requiring by section 1229 of the Code of Civil Procedure, that the judgment in matrimonial actions, where a reference of the issues has been ordered, must be rendered by the court, did not intend to authorize the court to examine the evidence, and to render such judgment as it should -justify, but only required the approval of the court as a safeguard against irregularity, fraud or collusion.
    Appeal from an order made at Special Term, denying a motion to confirm the report of a referee, and for leave to enter judgment thereon in favor of the plaintiff, and directing the entry of a judgment in favor of the defendant, and also from an order settling the previous order and denying a motion for a re-argument.
    This action was brought to procure a divorce on the ground of adultery. The defendant appeared and answered, her answer being a general denial. All the issues were referred to Frank Reynolds, Esq., as referee, to hear and determine. The referee found in favor of the plaintiff. Formal exceptions to the referee’s < report were filed.
    A motion, made to the court, to confirm the report of the referee and for judgment thereon, was denied, and the “report set aside for insufficiency of evidence.”

      Hugo Hirsh, for the appellant.

      Stephen B. Jacobs, for the respondent.
   Gilbert, J.:

The order directing a judgment for the defendant is in direct conflict with a previous decision of this court upon the same question, made at Special Term, in Kings county, in the case of Conger v. Conger, but not reported. The court in that case held as follows:

“ The Code of Civil Procedure (§ 1229) requires that the judgment in actions of this hind, after a trial before a referee, must be rendered by the court. Literally construed, that would require the court to examine the evidence and to render such judgment as the evidence justified. But I think that was not the intention of the Legislature. It seems to me, that the purpose of the Legislature was to require the fiat of the court as a safeguard against irregularity, collusion and fraud, and that it did not intend to provide an additional review of the decision of the referee upon questions of fact, or to require that the actual trial of the issue should be had, partly by the referee and partly by the court, or that the determination of the issue should be withdrawn from the referee. Such a construction would be incompatible with other provisions of the Code. The mode of reviewing the decisions of referees is clearly pointed out, namely, by appeal. (§§ 992, 994, 997, 1002.) The provisions relating to the trial are equally explicit. (§§ 1011,1012, 1016, 1018, 1022, 1023, 1228.) Then comes section 1229, which requires that the judgment must be rendered by the court. The act here indicated by the word “ rendered,” is that of conferring upon the clerk the requisite authority to enter the judgment directed by the referee. This practice is a substitute for a similar requirement contained in the former rule 87, and the present rale S3. (See Throop’s Notes to §§ 1229, 1012.) The court is not, I think, authorized to substitute another judgment for that directed by the referee. If, for any reason, the proceedings before the referee do not warrant the entry of a judgment conformably to his decision, no judgment can be rendered, and the motion for judgment must be simply denied, and the party who desires further relief must make an application therefor.” The same construction was given to section 1229 of the Code, by Van Voest, J., in Anonymous (3 Abb. New Cas., 161).

In Meyer v. Meyer (7 Weekly Dig., 535), the General Term, in the Third Department,- held that it was error to render judgment in a divorce case, contrary to the decision of the referee, Avhen the action being at issue was referred to take proofs and report with his opinion, and ■ that without findings, no judgment could be-entered. (See also Coe v. Coe, 37 Barb., 232.)

Upon a review of the subject, we think that the decision in Conger v. Conger was correct. The case before us shows the incongruity of allowing a judge, who has not tried the case, to decide it. The referee’s findings of fact and conclusions of law have been set aside, and none have been put in their place. There is no provision authorizing the court to make findings of fact and conclusions of law, on a trial by a referee. On the contrary, that duty has been cast exclusively upon the referee. (Code Civ. Pro., § 1022.) Indeed, a referee, in respect to the trial, is vested with the powers of' the court. (Id., §§ 1016-1018.) His report stands as the decision of the court. (Id., § 1228.) On what principle, then, can the court render a judgment contrary to the decision? Furthermore, how can the party against whom the judgment is rendered review the-decision ? One cannot except to a decision in his own favor, and without an exception no review of the decision can be had. An appeal may be taken from the judgment. But the judgment roll, would present no findings, conclusions of law or exceptions, consequently there would be nothing to review. If the findings of fact and conclusions of law of the Referee should be restored, the-only effect would be to show that a judgment had been rendered contrary to the decision of the court. An order directing such a, judgment certainly ought not to stand. Nor can an order directing-a judgment after a trial of the issues, without findings of fact or conclusions of law, be upheld. There is no necessity for a discussion of the practice governing trials by jury of special issues, for there-is no analogy between such practice and that applicable to references to hear and determine the issues in an action. Yerdicts in the former class of trials are merely ancillary to the decision, while-the report of a referee in the latter class stands as the decision itself.

The order dated June 5, 1880, which directs a judgment for defendant, should be reversed, with $10 costs and disbursements.

The appeal from the order dated the same day, made after a re-argument, should be dismissed without costs.

Barnard, P. J., and Dykman, J., concurred.

Order directing judgment for defendant reversed, with $10 costs and disbursements.

Appeal from order upon re-argument dismissed, without costs.


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    VIRGINIA N. TAYLOR, as Executrix, &c., Respondent, v. THOMAS L. WING, Appellant, Impleaded with ROBERT M. FERRIS and others.

      Mortgage — effect of an agreement by the owner of a prior mortgage, that a subsequent one shall prevail over it.

      Upon the execution of a fourth mortgage upon certain premises, the beneficial owner of the first mortgage executed and delivered to the fourth mortgagee an instrument, under seal, whereby he covenanted and agreed that the fourth mortgage should have priority of lien before and over the first mortgage, as fully and to the same effect as if it had been previously executed and recorded.

      Held, that the fourth mortgage, to the amount then due upon the first mortgage, thereby became a first lien upon the premises, and the priority thereby acquired by it over the second and third mortgages was not affected or lost by the subsequent payment or discharge of the said first mortgage.
    Appeal from a judgment in favor of tbe plaintiff, entered upon the trial of this action by the court, without a jury.
    The action was brought to foreclose two mortgages, which were owned by the plaintiff’s testator at the time of his death.
    In November, 1861, Bindley M. Eerris executed to the treasurer of Orange county his bond, conditioned to pay to the obligee $9,000, one year after his death, with interest from the time of his death, for the benefit of his three minor children, Gertrude O. Eerris, Caroline M. Eerris and William L. Eerris, Jr., — one-third to each. This bond was secured by a mortgage upon certain lands, which were afterwards mortgaged to plaintiff’s testator. This $9,000 was a trust fund, which Bindley M. Eerris had a right to the use of during his life. He also had about $1,500 of moneys which belonged to William L. Ferris, Jr., coming from his grandfather’s estate. In 1867 Lindley M. Ferris gave another mortgage upon the same lands to Garret B. Conklin for $2,000, and in 1869 he executed a third mortgage upon the same lands for $6,000, to Franck Taylor, the plaintiff’s testator. The Conklin mortgage was assigned to Taylor at the same time. Prior to November, 1870, Gertrude C. Ferris and Caroline M. Ferris, two of the beneficiaries in the county treasurer’s mortgage, released to Lindley M. Ferris all their rights therein. William L. Ferris, Jr., never released or discharged his interest in it. In November, 1870, Lindley M. Ferris, desiring some accommodation at the Farmers’ and Manufacturers’ Bank, gave to the said bank a mortgage upon these and other lands for $15,000, to secure the liabilities which he might incur to it. The bank, for the purpose of making its security greater, and ’as a condition of accepting the mortgage, required that the mortgage given to the county treasurer should be postponed to the bank mortgage. William L. Ferris, Jr., then the only beneficiary in the mortgage, being a minor, could not make a valid contract. An agreement in writing was then made between him, Ms father, and D. Golden Murray of the one part, and the said bank of the other part, by which it was stipulated that the said W. L. Ferris, Jr., on arriving at the age of twenty-one years, should execute to the said bank an instrument postponing the lien of the mortgage in which he had an interest to the lien of the bank mortgage. He became of age January 13, 1872, and on February 8, 1872, he did execute and deliver an instrument, under seal, by which he covenanted and agreed that the bank mortgage should have priority of lien before and above the mortgage given to the county treasurer, as fully and to the same effect as if it had been previously executed and recorded. Lindley M. Ferris died March 1, 1872, leaving a will, which was proved, and letters testamentary thereon issued to the executors. It was claimed that by various transfers of property and other acts of the parties, the county treasurer’s mortgage was, thereafter and prior to the commencement of this action, paid and discharged.

      W. Fa/rrmgton, for the appellant.

      O. I). M. Baker, for the respondent.
   Gilbert, J.:

The important question in this case relates to the effect of the agreement, dated February 8, 1872, between William L. Ferris, Jr., and the Farmers’ and Manufacturers’ Bant. At that time there were three mortgages upon the premises mentioned in the complaint, one held by the county treasurer of Orange, county for .$9,000, on which $3,000 only was due. That was the first mortgage, and it was held only as security for moneys belonging to William L. Ferris, which had been deposited with the county treasurer, for. investment, during the minority of said Ferris. Next in order of priority were the plaintiff’s two mortgages, amounting together to $8,000. The mortgage to the bank is for $15,000, and it is junior in date to all the mortgages above referred to. There is due upon the latter mortgage $2,100 of principal only, and it is now held by the defendant Wing, by virtue of an assignment thereof to him, made by an assignee of the bank. One of the find-' ings of the trial judge, is that William L. Ferris, by the agreement of February 8, 1872, covenanted and agreed that the mortgage to the bank have priority of lien above the said first-mentioned mortgage, as fully and to the same effect as if it had been previously executed and recorded. Nevertheless, he also found that the plaintiff’s mortgages are a first lien upon the mortgaged premises. We think it was error to give to the plaintiff’s mortgages priority of lien over the bank mortgage, held by Wing. No objection has been taken on the ground that the county treasurer was not a party to the agreement of February 8, 1872. He was a naked trustee only. William L. Ferris was the equitable owner of the mortgage held by the county treasurer, and entitled to an immediate assignment thereof, by reason of his having attained his majority. Ferris was, therefore, competent to- discharge the mortgage debt, and, of course, to do the lesser act of making a junior mortgage a lien prior to that of the mortgage which was held for his benefit. The plaintiff, however, was not a party to the agreement by which such priority of lien was given. The agreement does not import, nor was the object of it to accomplish the postponement of a prior mortgage, but to insure the advancement of a junior one. The language used is significant. The mortgage to the bank was given priority of lien before and above the said first-mentioned mortgage, as if it had been previously executed and recorded.” The-new position which the bank mortgage was to take, in part, in marshalling the liens on the mortgaged premises, was thus plainly indicated. The bank mortgage, to the extent of the amount due-, on the first mortgage, was put in the place of the latter in the order of priority of lien, and thenceforward it became a first mortgage for that amount, but it remained a third mortgage in all other-respects. In Frost v. Yonkers Savings Bank (70 N. Y., 553), there was an agreement between a judgment creditor, whose judgment was a first lien on premises which had been subsequently mortgaged four times, and the fourth mortgagee, by which the lien of the judgment was postponed and made subordinate to the lien of the fourth mortgage. It was held, that as between an assignee of the fourth mortgage, and a mortgagee whose lien was intermediate the judgment and the fourth mbrtgage, and who had purchased the mortgaged premises at a sale on execution issued upon the judgment, the agreement made the fourth mortgage the-senior security, and that the assignee of the latter had a right to redeem the prior mortgage without redeeming the judgment. Such an adjustment of the liens is equitable. The liens of the plaintiff’s, mortgages are not affected by the application of such a rule, for the reason that the bank mortgage merely takes the place of the first, mortgage, to the extent of the lien of the latter. Such priority of lien of the bank mortgage, followed the assignment thereof toWing. (70 N. Y., supra.)

If these views are correct, Wing is entitled to a priority of lien over the plaintiff’s mortgages, notwithstanding the fact found by the trial judge, that the mortgage to the county treasurer had been in legal effect paid before the assignment of the bank mortgage to Wing, i For such payment merely extinguished a lien which had become junior to those of the plaintiff’s mortgages, but it had no effect upon the lien of the bank mortgage, which had obtained priority over such liens of the plaintiff. The bank mortgage having obtained priority by the agreement of February 8, 1872, no act without the assent of the bank or its assignee could change the priority thus acquired.

We need not examine tbe evidence to see whether the last-named finding is correct, because there must be a new trial for the ■error in according to the plaintiff’s mortgages priority of lien over ■the bank mortgage held by Wing.

The judgment must be reversed, and a new trial granted, with -costs to abide the event.

I)ykman, J., concurred; Barnard, P. J., not sitting.

Judgment reversed, and new trial granted, with costs to abide ■event.


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    THEODORE BRINCKERHOFF, Appellant, v. HENRY BOSTWICK, as Receiver, &c., and others, Respondents.

      .National hank — right of a stockholder to sue the directors and a receiver for waste of funds — comptroller must first he asked to sue— IT. S. B. 8., 5234, 5239.
    'This action was brought by the stockholder of a national bank, against the bank, a receiver thereof, appointed by the comptroller of the currency, and. its directors, the complaint charging the directors with misconduct and neglect in discharging the duties of their office, to the damage and injury of the bank; it also alleged that the plaintiff had demanded of the receiver that he should bring an action against the directors for the said causes, and that he had refused to do so.

      Meld, that, as under section 5234 of the United States Devised Statutes, a direction from the comptroller is required to authorize a receiver to bring an action, the compliant was defective in not alleging a demand upon the comptroller for, and a refusal by him of a direction requiring the receiver to bring the said action.

      Semble, that an improper refusal on the part of the comptroller of the currency to prosecute or direct the receiver to prosecute such an action, would authorize the stockholders to sue in their own behalf in a State court, making the corporation or its representative a party defendant to tbe action.
    Appeal from a judgment entered upon an order sustaining a demurrer interposed to the complaint, on the ground that the court did not have jurisdiction of the action, and that the complaint did not contain facts sufficient to constitute a canse of action, and an appeal also from an order granting an extra allowance.

      The action is brought by a stockholder of the National Bank of Eishkill, on behalf of himself and all the stockholders, against the directors of the bank, the bank itself, and the receiver appointed by the comptroller of the currency. The complaint charges the directors with misconduct in making false reports, in appointing incompetent and dishonest officers, in not taking security for the faithful performance of their duties from the officers of the bank, in permitting overdrafts to large amounts without security, by loaning the money of the bank to irresponsible persons without security, and permitting the money and property of the bank to be stolen and wasted, whereby the stock of the bank is rendered worthless and the stockholders rendered liable to assessment for an amount equal to the amount of the stock. The complaint also-alleges the failure of the bank to redeem its circulating notes, and the appointment by the comptroller of the defendant Henry Bostwick as receiver ; also, that before the commencement of this action the plaintiff demanded of the receiver that he bring an action against the directors for the causes aforesaid, which demand the receiver refused to comply with; and further, that the defendants sued in this action as directors are still the directors of ‘"said bank, and said Bostwick, the receiver, is also one of such directors.
    The complaint demands judgment in favor of the plaintiff against the directors for double the value of his stock; or else, that the receiver recover the damages sustained by all the stockholders, and apply such damages for their benefit in relieving them from liability and loss. .

      E. A. Brewster, for the appellant.

      Homer A. Nelson, for certain respondents.
   Gilbert, J.:

We are unable to reach the conclusion that courts of the United States have been vested with an exclusive jurisdiction in actions of this kind. The statute which regulates the organization, conduct and management of national banks is a complete system. It forms a part of the law of the land, of each State as much as of the United States. Corporations formed under it may be, and probably in most instances are, composed of citizens of a single State. The trusts which the directors of such corporations assume, though undertaken primarily for the benefit of the corporation, yet in reality involve the interests of stockholders. For the corporation itself is a trustee for the latter. There is no good reason that I can discover why liabilities growing out of the wrongful acts of the directors of such corporations should, not be adjudicated in the State courts, either in actions brought by the corporation, or when the corporation refuses to sue, by the stockholders interested. I have found nothing in the statute referred to which in. express terms takes away the jurisdiction of the State courts, or which grants exclusive jurisdiction to courts of the United States in such cases. On the contrary, the provisions of the statute which relate to this subject, with a single exception, seem to confer jurisdiction upon State courts and United States courts alike. The statute is contained in title 62 of the Revised Statutes of the United States, the title of which is “National Banks.” Chapter 1 relates to the organization and powers of such banks; section 5136 of that chapter grants to the corporations formed under it power to sue and be sued in any court of law and equity as fully as natural persons. As, therefore, the corporation may sue in a State court, to enforce the liability of its directors or officers for negligent or tortious acts, it is difficult to perceive why stockholders have not the same right, in case of the default of the corporation to sue.

It is urged, however, that section 5239 of chapter 4 of the title referred to vests exclusive jurisdiction in courts of the United States. The heading of that chapter is “Dissolution and Receivership,” and it will aid in ascertaining the intention expressed in that section. (People v. Molyneux, 40 N. Y., 113 ; Bishop v. Barton, 2 Hun, 436, affirmed 64 N. Y., 637.) We are of opinion that the exclusive jurisdiction conferred by that section is confined to actions brought for the purpose of forfeiting the franchises of the corporation.

But there is not in the complaint before us a sufficient averment of the default of the corporation to sue. The corporation itself has, as a consequence of the wrongs complained of, been deprived of the power to act; for section 5234 authorizes the comptroller of the currency to appoint a receiver of a corporation that is in default, and such receiver, under the direction of the comptroller of the currency, is required to collect all claims belonging to the corporation, and the claim set forth in the complaint is such a claim. (§ 5239.)

The complaint avers that a demand was made of the receiver that he prosecute an action against the directors of the bank, &c., and that he neglected and refused to do so. The receiver acted in accordance with his duty. He had no authority to prosecute, except under the direction of the comptroller of the currency. "Whether a refusal of the comptroller of the currency to give such a direction would suffice to entitle the stockholders to maintain this action, is a question which is not directly before us. It will be time enough to determine that question after such a demand shall have been made and refused, and the reasons for such refusal shall have been made known. It is sufficient at this time to say that an improper refusal on the part of the comptroller of the currency to prosecute aud to direct the receiver to prosecute, would, in our judgment, entitle the stockholders to sue in their own behalf, making the corporation or its representative a party defendant.

We perceive no objection to the order granting an extra allowance, and none has been pointed out. That order must be affirmed, with $10 costs, and the judgment must be affirmed, with costs.

Dykman, J., concurred; Barnard, P. J., not sitting.

Judgment, and order granting an extra allowance affirmed, with costs.