author: Maynard, J.

text:
    Jehiel Hymes, Resp’t, v. William Esty et al., Ex’rs, App’lts.

      (Court of Appeals,

      Filed May 24, 1892.)

    1. Deed—Breach of covenant of quiet enjoyment—Measure of dam— ages—Costs.
    In an action for breach of covenant of quiet enjoyment contained in a deed by reason of the fact that a portion of the premises conveyed was a part of a public street, plaintiff was allowed to prove' under defendant’s, objection the fee value of the strip taken, and was not restricted to the depreciation in the value of the premises caused by its appropriation to the public uses of a highway. Held, error.
    2. Same.
    In such an action the proper measure of damages is the diminution, if any, in the value of the premises at the time of the eviction, caused by the assertion by the public of its right to the use of the street, with interest to the time of the trial, together with the costs of the eviction action and interest thereon.
    Appeal from judgment of .the supreme court, general term* fourth department, affirming judgment in favor of plaintiff.

      Charles A. Collin, for app’lt; F. F. Tibbetts, for resp’t.

       Reversing 39 St. Rep., 810.

   Maynard, J.

The plaintiff is the owner of a lot in the city of Ithaca, conveyed to him in 1876, with covenants of warranty for quiet enjoyment. The defendant’s testator conveyed the same premises, with like covenants, to'the plaintiff’s grantor in 1869. The plaintiff claims to have been evicted in 1881 from a triangular strip, twelve feet and eleven inches wide upon the front, and containing 283 square feet out of 8,250 square feet in the whole lot. The eviction complained of consisted of a recovery by the village of Ithaca of a judgment against the plaintiff, adjudging that he be perpetually enjoined from building or maintaining a fence across this strip, or from in any way interfering with its use .and enjoyment as a public street of such village.

It appears from the findings of the court upon the trial of the ■action in which such judgment was rendered, that when the defendant’s testator, or his grantor, owned the property, and before 1860, this strip had been dedicated' by the owner to the public use as a street or passageway, and had been accepted, improved and maintained by the village, and used and occupied as a public street or passageway for more than twenty-five years prior to 1882. The claim of tne plaintiff was that, in 1869, when his grantor purchased of Esty, and also in 1876, when plaintiff purchased, this ■strip was not used as a street; that there was then no open, visible highway there, but that the strip was fenced across upon the front and enclosed with the rest of the lot, and that there was nothing upon the premises to indicate that it was part of a public street, or to put him upon inquiry in regard to it This court held upon a former appeal, 116 N. Y, 501; 27 St Rep., 555, that if this claim was sustained by proofs to the satisfaction of the jury, there had been such a breach of the covenant of quiet enjoyment in the deed from Esty to the plaintiff’s grantor as would support this action.

It was held that the case was taken out of the ordinary rule, that the existence of a public highway at the time of the conveyance of lands with covenant for quiet enjoyment, or against incumbrances, is not a breach of such covenant. It was there declared that such rule was limited to cases where the public easement, was open and visible and in actual use, and had no application to cases like the present, where, if the plaintiff’s contention is true, there was, at the time of the purchase, no indication of the existence of a highway. That decision proceeded upon sound and just principles and we see no occasion to restrict or modify it in any respect. Upon the last trial the case was submitted to the jury upon this issue, strictly in accordance with the views expressed in the opinion of this court, and a verdict was returned for the plaintiff. A new and important question, however, is now raised by the counsel for the appellants, which is, that in making his proof the plaintiff was not confined to the correct measure of ■damages. He was allowed to prove, under defendant’s objection, ■the fee value of the strip taken, and was not restricted to the depreciation in the value of the premises caused by its appropriation to the public uses of a highway. We think this decision of the trial court was erroneous. The damages lawfully recoverable in such cases may be commensurate with the eviction, but cannot exceed it. The plaintiff has not been deprived of the fee; nothing has been taken from him but a public easement; the right of free and unmolested passage by the people with their property over the land, which is quite a different thing in law from the taking of the land itself. The existence of such a servitude upon an estate does not affect the general rights of property ■of the owner in the same. All such remain, and may be asserted by him in all lawful ways, subject to the enjoyment of the existing easement. The owner of the soil over which a highway lias been opened may make any and all uses of the land to which it can be applied, and have all profits which can be derived from it consistently with its use by the public as a street. . He may maintain trespass or ejectment against an intruder, and it has been held that he may sink a drain or water course below the surface, if lie does not in any manner infringe upon the rights of the public.

In another case it was held that he might have an action of tort against one who erects his house upon the line of the street, and extends his bay window over the land of the highway, though it be so high above the passing vehicles as not to affect the travel injuriously. Washburn on Easements and Servitudes, 3d ed., 226, 265. To such an extent have the rights of the land owner been recognized and protected, that it was held by this court in Robert v. Sadler, 104 N. Y., 229; 5 St. Rep., 594, that in the work of constructing or repairing a street the public authorities could not authorize material to be taken from the owner’s land, over which the street was laid out, for the purpose of improving or grading portions of the street elsewhere, beyond what it might be necessary to remove for the purpose of constructing and maintaining the street in proper condition over the premises of such •owner.

In short, with respect to the land in question, the plaintiff can •exercise all the prerogatives of owner, except that he can do nothing which will obstruct or interfere with the free and uninterrupted right of passage by the public, or the action of the proper authorities in making, improving and maintaining the highway, with all its necessary incidents and privileges, and when the .■street is discontinued he will hold the land free from the incumbrance. It cannot be said that these rights are merely nominal, and have no intrinsic value. We have recently held In re City of Buffalo, 131 N. Y., 293; 43 St. Rep., 278, affirming same case, 15 N.Y., Supp., 775; 39 St. Rep., 417, that the fee remaining in the owner of lands, upon which a public street exists, is of very considerable value, and a large award of damages was sustained where the city sought to appropriate the fee. If the city of Ithaca should propose to condemn the fee of this land, providing it had the power to do so, it is not at all improbable that the plaintiff would be found in court insisting, and very properly too, that it had a substantial value to him for which he should be adequately compensated.

It follows that the plaintiff should have been limited in his proof of damages to the depreciation or difference in value of his property at the time of the eviction in 1881, caused by the •existence and opening of a public street across his lands. It is the manner in which this easement affects the entire premises purchased which constitutes his loss, if any. It may have proved to be a benefit rather than an injury. It not infrequently happens that a lot owner will consent to the laying out of a street across his lands because of the convenience of access it will afford, or the creation of a new frontage for building lots, or some other compensatory advantage which it brings. If the plaintiff’s entire lot is less valuable, or marketable, on account of the encroaching street, to that extent he should be remunerated; but beyond that-there is, neither reason nor justice in a demand for payment In other words, the same rule should be applied as where a covenant against incumbrances has been broken by the existence of an easement. In such cases it was held by this - court in Huyck v. Andrews, 113 N.Y., 81; 21 St. Rep., 924, that the proper measure of damages was the difference between the value of the land without and with the easement. Bari, J., in delivering the opinion of the court, refers to the case of Whitbeck v. Cook, 15 Johns., 483, where it was held that the existence of a public highway was not a breach of a covenant for quiet enjoyment, and says that “the ratio decidendi is equally applicable” to a covenant against incumbrances, and where the breach consists of the. existence of a public easement, which is excepted from the operation of the rule laid down in Whitbeck v. Cook, we think there can be no difference in principle in the measure of, damages allowed.

The cases prescribing the rule of damages where there has been an entire failure of title to the premises granted, or some definite-portion of them, or a total deprivation of. the right of possession and enjoyment, have no application. If the eviction has been from all the lands conveyed, the recovery has been limited to the-purchase price paid and interest from . the time of dispossession ;. if from a definite part capable of physical ascertainment and boundary, then to such part of the original price as bears the same ratio to the whole consideration that the value of the land to which the title has failed bears to the value of the whole premises. Staats v. Ten Eyck's Ex'rs, 3 Caines, 111; Pitcher v. Livingston, 4 Johns., 1; Morris v. Phelps, 5 id., 49; Guthrie v. Pugsley, 12 id., 126; Wager v. Schuyler, 1 Wend., 554; Kinney v. Watts, 14 id., 38 ; Giles v. Dugro, 1 Duer, 331; Mohr v. Parmelee, 43 N.Y. Supr., 320; Kelly v. Dutch Church, 2 Hill, 105; Baxter v. Ryeres, 13 Barb., 267; Adams v. Conover, 22 Hun, 424; Hunt v. Raplee, 44 id., 149; 7 St. Rep., 783.

This rule makes the original agreement of the parties the inflexible measure of value and seems to have had a very ancient, origin; having been adopted at a time when land was not regarded as possessed of a market value. Sedgwick on Damages,. 8th ed., § 951.

It is necessarily somewhat arbitrary and unjust in its operation and ordinarily excludes the benefits to which the grantee would seem to-be entitled accruing from a good bargain, or a rise in the market, value, or on account of expenditures made for permanent improvements, unless the latter may be deemed a part of the price-paid for the proporty. We cannot find that it has ever directly received the approval of- this court. In Furniss v. Ferguson, 15 N. Y., 437, Selden, J., refers to the rule as a strictly equitable-principle, which he deemed applicable to the case of a sale of ai judgment, where there was a warranty of title; but there the-warranty was expressly limited to the consideration paid; and the-majority of the court declined to assent to his dicta upon the subject. In Taylor v. Barnes, 69 N. Y., 430, Allen, J., refers to it. as the prevailing rule in this state in actions of breaches' of cove •nant for quiet enjoyment, and characterizes it as a rule which “is very favorable to the covenantors," and declines to extend it to a case of a breach of contract of sale where the vendor had undertaken to complete and make perfect the title. Adams v. Conover, supra, was affirmed in this court, 87 N. Y., 422, but the point was not noticed in the opinion, unless included in the exceptions, which the learned judge says were “carefully examined without finding sufficient reason for a reversal of the judgment”

But it is unnecessary in this case to consider further the reasons of the rule or determine its precise limitations. It is evident that it cannot with propriety or justice be applied to a case like the present, where the breach consists of the existence of an unknown public easement, or servitude, which all have an equal right to enjoy, including the grantee, and which may be in the nature of a benefit, rather than a burden to the premises conveyed. The only practical test of the extent of the injury which the purchaser then sustains would seem to be the diminution, if any, in the value of the property at the time of the eviction,, caused by the assertion by the public of its right to the use of the street, with interest to the time of trial, and the costs of the action which resulted in the eviction, and interest from the time -of the recovery; and this is the rule which we think should have been applied at the trial.

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

All concur, except Finch, J., taking no part.


source: Caselaw Access Project

author: Finch, J.

license: Public Domain

text:
    Levi P. Rose, App’lt, v. The City of Yonkers et al., Resp’ts.

      (Court of Appeals,

      Filed May 24, 1892.)

    1. Res ad judicata—Estoppel—Demurrer.
    Plaintiffs complaint alleged a conveyance by him to the municipal corporation of certain land upon the condition that it should only be used as a highway, and; that no erection save a public monument should ever be placed upon it, and alleged a breach thereof by defendant in permitting the building of a house thereon, and further stating that in a previous action between the same parties to enforce the forfeiture, all the facts now alleged were found to be true except notice to the city; and the judgment therein for plaintiff was reversed by the general term and court of appeals on the ground of said lack of notice; that by said action the city received notice, but continued to permit the encroachment. Held, that there was not enough in' the admissions of the complaint to make the judgment in the prior action a bar so as to sustain a demurrer.
    :3. Same.
    Said judgment determined that there was then no right of action in the plaintiff and no forfeiture of the title of the defendant, and to that extent was conclusive, but the right which he did not then have he might possibly thereafter acquire.
    Appeal from judgment of the supreme court, general term, second department, affirming judgment sustaining demurrer to -complaint.

      James M. Hunt, for app’lt; Theodore Fitch and Joseph F. Daly, ior resp’ts.

       Reversing 39 St. Rep., 985.

   Finch, J.

The demurrers interposed by the defendants have-been sustained upon the ground that the complaint, on its face,, disclosed the existence of a prior judgment between the same parties and for the same cause of action, which operates' as a bar to-any recovery by the plaintiff in the present suit. Necessarily what we have a right to know about such prior judgment cannot transcend the facts disclosed by the present complaint, and we must not go beyond its statement, although other sources of information are within our reach. Confining our attention to that document, it is necessary to consider its allegations in connection with the admissions which form the support of the demurrers.

The plaintiff alleges a conveyance by him to the municipal corporation of certain described premises, excepting and reserving, and upon the express condition, “ that the strip of land forming part of the premises above described, and being twelve feet and six inches in width, and extending along said Academy street, shall forever hereafter bean d remain a part of said Academy street, and shall never be used for any other purpose whatsoever, and also that all the residue of the said land hereby conveyed shall forever hereafter be and remain public and open as a public highway, and that no house, building or other erection whatsoever except a public monument shall ever be built or erected or permitted upon the said land or any part thereof.” The complaint then alleges a breach of this condition by the city of Yonkers in that it has permitted, and still continues to permit, a house or building to stand upon said premises; and in order to establish such permission alleges notice to the city of the fact of the encroachment and full knowledge of its existence. The cause of action alleged is thus a breach of the condition of the deed, which- consists in suffering and permitting-an unlawful encroachment after having been fully informed of its-existence. The forfeiture claimed is rested upon the conscious- and willful sufferance of the city as amounting to a permission.. In pleading the fact of such permission the details are stated', which provoked the demurrers. It is averred that a previous--, action- had been brought by the same plaintiff against the same-defendants to enforce a forfeiture; that upon the trial all the facts now alleged were found to be true, except notice to or knowledge of the city; that judgment was rendered for the plaintiff, which judgment on appeal was reversed by the general term upon the-law and-not upon the facts; that the plaintiff appealed to this court: where the judgment of reversal was affirmed, and that such decision was based upon the fact that prior to the' commencement of' that action the city of Yonkers had no notice of any encroachment. It is further averred that on that trial the city defended, through the city attorney, and so-it acquired full knowledge of all the alleged facts, but, nevertheless, continued thereafter to suffer and permit the encroachment. The pleader did not say that upon the decision of this court in the first action judgment absolute was ordered for the defendant, nor if ordered that any such judgment was in fact entered, but possibly it may fairly be presumed that such usual and necessary proceedings were had. But even then. there is not enough in the admissions of the complaint to make the judgment in the prior action necessarily a bar, and I think it should not so be adjudged upon the demurrers. We do not know what the pleadings were in the prior suit, or what issues were in controversy.

It may be that the deed and its legal effect as containing a condition and not a covenant, and the fact of the encroachment, were all admitted and conceded, and that the only issue raised and tried was that of the sufferance or permission of the city. Or, what is more probable, because indicated by the opinion in this •court, that both appellate tribunals agreed with the trial court that the deed contained a condition and not a covenant, that for ■a breach there could be a forfeiture, that a violation of its terms was shown, but that plaintiff could not recover because, and only because, the city had no knowledge of the encroachment and could not be said to have permitted a wrong of which it was wholly ignorant On that state of facts, the judgment absolute for the defendant would establish that the plaintiff had no cause of action, but would not prevent him from thereafter acquiring one, and that is exactly what the present complaint alleges. It sets up a cause of action which accrued after the former judgment, founded upon a subsequent occurrence, and finding for its •support new and different evidence. The two causes of action are not and cannot be identical, for one never in fact existed and the other has since come into being. A recovery in the present suit will not contradict the judgment in the prior one, or be inconsistent with it Both may stand without collision.

Illustration is not argument, but sometimes helps us to a view ■of the truth. Let us suppose a suit on a contract in which the plaintiff recovers, but on appeal to the general term the judgment is reversed, because when the suit was brought the debt was not due or could not be enforced without a demand; that the plaintiff doubting the law and faced with a difficulty which he cannot cure on a new trial appeals to this court, where the reversal is affirmed and judgment absolute is ordered for the defendant. Is it true that such judgment prevents utterly a future recovery on the contract? May not the plaintiff sue when the ■debt does mature, or make the needed demand and then maintain his action ? I think the judgment as a bar depends always to some extent upon the nature of the controversy and the actual decision made. On the admission of the complaint we ought not to assume that something was adjudged against the plaintiff beyond what he admits, and which may prove to be exactly the reverse of what the judgment did determine.

I do not undertake to say what the conclusion should be if the prior judgment record was before us, and competent proof of what was adjudged. I only say that if no more was- adjudged-than what is admitted by this complaint the judgment absolute is not necessarily a bar. It did determine that there was then no right of action in the plaintiff and no forfeiture of the title of the defendant. To that extent it is conclusive. It settles against the plaintiff the right which he then asserted. But the right which he did not then have he might possibly thereafter acquire, unless some vital point adjudged prevented that possibility. Nothing of that sort is admitted by the complaint, but the exact contrary is asserted. The cases fully justify this doctrine. Bell v. Merrifield, 109 N. Y., 212; 14 St. Rep., 796; Lewis v. O. N. & P. Co., 125 N. Y., 341; 34 St. Rep., 973; People ex rel. Bridgman v. Hall, 104 N. Y., 170; 5 St. Rep., 578; Russell v. Place, 94 U. S., 606.

Some peculiar force is occasionally attributed to a judgment absolute entered upon the required stipulation because entered by consent, and the case of Roberts v. Baumgarten, 126 N. Y., 336 ; 37 St. Rep., 482, is cited as authority. Undoubtedly the appellant in such a case concedes by his appeal that he cannot recover upon a new trial if the doctrine of the general term shall remain unreversed, and the failure to change it on appeal to this court involves judgment absolute against him without the useless formality of a new trial. But where that judgment absolute to which the adversary is entitled is a general judgment for the defendant dismissing the complaint, it requires an examination of the record to determine what in truth was involved in the decision. The identity of the two causes of action cannot otherwise be ascertained, and that identity must be shown by the party asserting the bar of a prior adjudication. If, although the two causes of action are different and not identical, there is yet some vital question common to both determined in the earlier suit, that fact must in some way be made to appear. Here the two causes of action are not identical, for the present one arose out of new facts later occurring, and the complaint not only does not admit an adverse decision upon some material issue common to both cases, but asserts an adjudication in plaintiff’s favor upon every such issue except that of notice to the city.

Where the prior judgment claimed to be a bar is in favor of a plaintiff and awards a recovery, the character of the judgment, itself in connection with the pleadings affords a sufficient ground' from which to infer the necessary scope and range of the adjudication. The fact of the recovery cannot stand except on the condition that every defense to it pleaded or which might have been inteiposed is cut off. The existence of any such defense is inconsistent with the recovery. But where the judgment is one of no cause of action it can have no force as a bar until we can ascertain what was involved in it and what in truth was decided. It may have proceeded upon purely technical grounds, or have been simply the equivalent of a non-suit, or be found to have decided nothing involved in the later controversy.

In an equity case such a judgment might be given because there was a remedy at law upon the very contract involved or without in any manner cutting off or destroying the legal right Generally the test is to inquire whether the new judgment sought is inconsistent with the prior one rendered, and where that is one of no cause of action there may be no such real inconsistency and the party claiming that there is must show it No needless or purely constructive bar should be encouraged. The real truth and actual fact should always be sought In the present case no such necessary collision was admitted by the complaint. If it existed it must be shown, and we leave to the defendant full opportunity to do so upon the trial.

The judgment should be reversed and the demurrers overruled, with costs, but with leave to the defendants to answer within twenty days from notice of entry of judgment upon payment of ■costs of the demurrers.

All concur.


author: Gray, J.

text:
    Patrick E. Walsh, App’lt, v. The Mutual Life Ins. Co., Resp’t.

      (Court of Appeals,

      Filed May 24, 1892.)

    Insurance (life)—Policy in favor of wife and children.
    A policy on the life of a husband provided for payment to the wife “ if living, in conformity with the statute, and if not living, to her children and their guardian, etc.” Bessie, a daughter, died intestate leaving a husband and children; then the wife died; then Solomon, a son, died leaving a widow and children, and finally Traub, the assured, died, leaving Carrie, a daughter, alone surviving. Held, that upon the death of the wife, her children living at that time became vested with every right to and interest in the policy to the exclusion of the representatives of the child who died before the mother.
    Appeal from judgment of the supreme court, general term, third department, reversing interlocutory judgment overruling defendant’s demurrer to complaint

      F. M. Danaher, for app’lt; Julien T. Davies, for resp’t

       Reversing 39 St. Rep., 710.

   Gray, J.

The complaint sets forth the issuance by the defendant of a policy of insurance, whereby it insured the life of Traub for the sole use of his wife Rica, in a sum named, and "promised to pay the amount to her, as the assured, “ if living, in ■conformity with the statute, and, if not living, to her children or their guardian, etc.” It further showed these facts, namely, that at that time the Traubs had three children living. Bessie, a daughter, died first, intestate and leaving a husband and children; "then the wife died; then Solomon, a son, died, intestate and leaving a widow and children; and, finally, Traub died. Carrie, a daughter, alone survived, and one-third of the policy was paid by the company to her. Another third was paid to the administratrix of Solomon, who had died intermediate his mother and father. The plaintiff took an assignment from Carrie and from .Solomon’s administratrix of their interest in the policy and claims, as their assignee, to be entitled to the remaining one-third of the policy. The defendant demurred to the complaint for insufficiency ■of facts to constitute a cause of action and the question presented is, did Bessie, the first child who died, have such an interest in this policy as survived her decease and, upon her mother’s death, vested in her personal representatives; or did all interest in the (policy, upon the death of the wife of Traub, vest at once in the two children surviving her? Another aspect of the question which the plaintiff presented is this: assuming that all interests settled in the two surviving children, upon their mother’s death, was it, nevertheless, conditional upon their both surviving their father; so that by Solomon’s death his interest was lost and Carrie, who survived all, had the sole claim to the insurance moneys ?

At the special term the judgment went for the plaintiff; but. at the general term the decision was the other way; and. two of the learned justices thought that Bessie, who had predeceased her' mother, had an interest in the policy, which, upon her death, passed to her personal representatives. We feel constrained to-differ with the learned general term justices and to uphold the-plaintiff’s appeal. If we were at liberty to treat of this question at first hand and as altogether an original one in this court, I should say that the arguments to sustain the judgment of the general term are cogent and not easily overcome. Certainly they have a moral support in equitable considerations. But if we. are to be guided in the disposition of the cases which come before us by the principle store decisis, then we must adhere to-views which have been held and assented to within recent decisions. In the case of the United States Trust Co. v. The Mutual Benefit Life Insurance Co., 115 N. Y., 152; 24 St. Rep., 1, the plaintiff sued as the guardian of certain grandchildren of the assured. The policy was upon the life of Finn for the sole use of his wife and, in case she should die before him, the amount was-payable to their children, or to their guardian. The wife first died and their three children survived her, but two of them predeceased Finn, their father. The plaintiff claimed that the children of a child who had died after the mother were entitled to receive among them an equal one-third of the policy. The decision was against their right to take anything under the policy. It was held that as grandchildren were not named in the contract, for that reason they could not be regarded as having been assured. Judge Earl, in the opinion, with respect to the nature of the interests which settled in the assured under such a policy, spoke in such wise as to cover this case. He said: “ When she (referring to Mrs. Finn) died before her husband, the only persons inter- . ested in the policy were her children then living, and the whole policy, as a chose in action, belonged to them. They held vested interests therein, as they could in any other chose in action, payable at a future time.”

This expression seems very authoritative, for although the-question presented and decided was whether grandchildren could acquire any interest, and although all the children in that case happened to survive the wife, nevertheless, the learned judge passed upon the nature of the interest of the children in such a policy, and used very precise and exclusive language in that respect. With that opinion all the members of the court concurred. While referring to the opinion in that case, I may add that the-concluding remarks of the learned judge need not embarrass our conclusion here. He said: “ If we are wrong in this construction * * * then * * the policy was payable to. her children as a class, and those of the class would take who were in being at the time when the policy became payable.” That was. not the decision, and it was not intended to be the expression of an opinion upon the case, otherwise than that in no event could grandchildren take, inasmuch as, upon an assumption that the court was in error in what had been held, the only alternative was. the proposition stated. It was at once illustrative of the unsoundness of the plaintiff’s claim, and, at the same time, reasoning ele-. duetively, in further exclusion of the possibility of any interest having vested in the children at the time the policy issued. Previously, in Anderson v. Goldsmidt, 103 N. Y., 617; 4 St. Rep., 286, the same judge had delivered the opinion of the court; a case where wife and husband had joined in an assignment of a policy issued in her favor, and, in case of her death before him, making the amount of insurance payable to her children. The wife defended against the suit of the assignee on the ground that she was a married woman, with children having an interest in the policy. The plaintiff’s recovery was upheld, and it was there said that the interest of the children was contingent, and that the contingency did not arise which gave them any interest whatever in the policy. We have, therefore, in these two recent cases, authoritative opinions that children have none other than a contingent, interest in a policy issued in such a case, and do not become' actually vested with an interest unless the wife die before the termination of the life insured against and they survive her; and, as the contract then is one with her children, only those who answer at that time that description acquire an interest in the policy. Only in such an event would there arise a distinct class of beneficiaries under the contract of insurance.

Some stress is laid upon the remarks of Judge Pinch in the-case of Whitehead v. The New York Life Insurance Co., 102 N. Y., 143 ; 1 St. Rep., 344, decided very shortly before the Anderson case. That was a case where the insurance was upon the husband’s life and in favor of his wife or her personal representatives, with a provision that in case she died before him the insurance should vest in the children of the insured. The wife died and the husband surrendered the policy to the company, in consideration of sums paid to him for the surrender. The children then sought to have the surrender set aside and the policies reinstated as subsisting obligations of the defendant company. Their action was sustained. Judge Pinch, in his opinion, speaks of the interest in the policy as one which was vested in the wife, “ and one also in the children.” What he meant, however, seems explained by his subsequent observation that it was an interest which vested in wife and children “ as the assured, under the provisions of the statute; ” referring to the act of 1840, Laws of 1840, chap. 80, which was passed as a provision for orphanage and widowhood, and authorized the issuance of policies insuring a man’s life in favor of his wife, and also to provide by their terms for the payment of the insurance moneys to children, in case of her decease before that of her husband. The opinion is not authority for the proposition that an interest vested in the children upon the issuance of the policy in favor of the wife, which could not be lost, or divested, by their death before their mother as the assured. It decided that, by force of the act of 1840, such a policy, in favor of the wife and, in case of her death, made payable to her children, vested an interest in the children, which, upon the happening of the contingency named, conferred upon them the rights of ownership, and without their assent it could not be surrendered nor released. That was the decision called for by the case before the court. In a certain sense, upon the issuance of the policy such an interest in, or right to, its continuance as an obligation did vest, or, more properly, enure to her children.

It did not vest in the technical sense of the term as it is used in connection with estates created under testamentary devises; but the interest was such as, when the contractual relation with the mother ceased by her death, they, who were her children, •could, by the terms of the contract with the company, as authorised by the statute, assert and enforce it for their protection, as substituted parties in the place of the first assured. That such a meaning is to be attached to Judge Finch's remarks seems evident from the fact that Judge Earl, in his opinion in the 'United States .Trust Company's case, supra, cites the Whitehead case as an authority, and had the opinion fresh in his mind when delivering the opinion in the Anderson case. In a case recently decided by the supreme court of Pennsylvania, where the policy was issued by a New York company, and was in favor of the wife, and, in case of her death, the insurance was payable to her children, the court construed the policy to be anobligation which made the insurance money payable to her, if she survived her husband, but, if she did not, it was payable to her children then living.”

That case was decided in 1889, the same year as was the Trust Company's case, supra, and seems a strong illustration of the force of the proposition as to the contingent nature of the childrens’ interest in the policy, in that it impressed itself similarly upon the minds of the members of the two courts.

I do not think there is any reason for, or that we should, resort to the rules which obtain in cases where the question relates to the vesting of estates created by will and depends upon the •construction of the language of the testamentary devise. A will is in no sense a contract and an insurance policy is. St. John v. Insurance Co., 13 N. Y., 31; Olmsted v. Keyes, 85 id., 593. In the endeavor to effectuate the intention of a testator, courts are .allowed a greater latitude of action within settled rules than when the subject of their consideration is a contract between parties. In the one case, courts will go far to avoid a construction which defeats an intention, apparent from a consideration of the-whole will and of the circumstances surrounding its making, that the issue of children who may have predeceased the testator, ■or an event mentioned for the determination of some suspension of the estate, shall share in a general provision for the testator’s family.

Presumptions of an intention that all who could naturally be regarded as objects of his regard are comprehended will be permitted to influence and guide construction, wherever possible without conflict with plain provisions in the will. .But, in the case of a contract, where the minds of the contracting parties have met and which is supposed to resume their purposes and to-contain their agreements, construction may not be so liberal as to-permit a departure from a precise and strict conformity with its terms, if compliance is possible. Mr. Story, in his work on contracts (§ 639) laid down this rule of construction: “ If its language is neither uncertain nor ambiguous, it is to be expounded according to its apparent import, and is not to be warped from the-ordinary meaning of its terms, in order to harmonize with uncertain suppositions, in regard to either the probable intention of the parties contracting, or to the probable changes which they would have made in their contract, had they foreseen certain contingencies.”

As a contract then, the provisions of this policy are to be construed as contracts ordinarily are construed. They should be read and enforced, if unambiguous, according to the plain meaning of the words used. This policy, in the respect we are considering, used clear and definite words. The defendant contracted with the wife of Traub and assured her thereby of a certain payment, in the event that she survived her husband; and the parties further agreed that, if she failed to live till then, the payment was to be made to her children, or their guardian. The ordinary meaning of the word children is indisputable and the more reasonable ambiguity to be supposed would consist in whether it was only that child, or those children, who should survive the father who would be entitled to claim payment under the policy. But this difficulty is removed by authority and upon reasoning. If others than her children were to benefit by the insurance, it was quite possible to write them into the contract; but here definite parties are named as substitutive beneficiaries. The instant the mother died, those who answered the description of her children became the parties assured by the policy. The personal representatives of the child who had predeceased the wife could not be substituted as parties to a contract which expressly describes “ children.”

At any rate, by parity of reasoning, if grandchildren in the Trust Company's case, could not take because not named in the policy, how can executors or administrators take if they are not named; and, upon the authority of those cases, which declare the interest of children to be contingent during their mother’s lifetime, how could the child who had predeceased Mrs. Traub have possessed an interest which she could transmit to her personal representatives and which they could assert under such a contract ? I think the conclusion must be reached that, upon the death of Traub’s wife, her children living at that time became vested with every right to and interest in the policy.

In the case supposed by one of the learned justices at the general term, of the death of all of the children before the mother and then of her predeceasing her husband, we have authority for suggesting that the obligation of the insurer would be enforceable by the personal representatives of the husband, if he had not administered upon it. Olmsted v. Keyes, 85 N. Y., 593. In such a case, if all the children had died before their mother, the interest in the policy would be solely in' her, and, upon her death, like any other chose'in action, would pass to her husband. If lie should not make any disposition of it with the company during his lifetime his personal representatives would have the right to administer upon it.

It is needless, however, to discuss or decide upon the supposed case. It is sufficient to say that such an obligation of the insurance company could not fail for the want of a payee, in any contingency that I can conceive of.

The views expressed lead to the conclusion that the judgment of the general term should be reversed and the judgment entered upon the interlocutory judgment at the special term should be affirmed, with costs at'the general term and in this court

All concur (Maynard, J., in result), Peokham, J., not sitting.


author: O’Brien, J.

text:
    Frederick A. Haight, App’lt, v. Watson B. Dickerman, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed March 31, 1892.)

    New York stock - exchange —Rights ok creditors on sale ok seat ok MEMBER.
    Where the seat of a member of the New York Stock Exchange is not ■sold upon his suspension, but his time for settlement is extended by the governing committee from time to time until his death, when the member.ship is sold, the rights of creditors become vested as of the time of such sale, and are to be adjusted in accordance with the provisions of the constitution relating to the distribution of the proceeds of a sale afttr the death of a member as they are at that time, and not as they were at the time of his suspension.
    Appeal from an order vacating a preliminary injunction, jEdward C. Perkins, for app’lt; Leiois Cass Ledyard, for resp’t.
   O’Brien, J.

The plaintiff, who was a member of the New York Stock Exchange, and a creditor'of one William K. Soutter, who was also a member of the exchange, brought this suit to ■compel an accounting by the exchange of the proceeds of the •sale of Soutter’s seat, and a distribution thereof among those of his creditors who are also members of the exchange, and to restrain it from making a distribution among the other creditors of that class, to the exclusion of the plaintiff.

The preliminary injunction which was obtained was vacated by the order from which this appeal is taken, upon the ground that defendant’s right to throw out the plaintiff’s claim against Soutter, and direct a distribution among the other creditors, who are members of the exchange, was pursuant to authority vested in the committee on admissions under certain provisions of the constitution of the exchange.

We do not understand that any real contention is made as to the force and effect of provisions in the constitution upon the rights of members. If such existed, it has been settled' by the ■case of White v. Brownell, 8 Abb. Pr., N. S., 318, and 'by the other cases referred to in the opinion of Mr. Justice Lawrence. Jn the case cited, of White v. Brownell, wherein the nature of an .association such as the Stock Exchange was considered, it was .said: “As this association is not organized in-pursuance of any statute, nor are the terms of membership fixed by the principle ■of the common law, it follows that the agreement which the members make among themselves on the subject must establish and determine the rights of the parties on the subject. The constitution of the association and its laws, agreed upon by the members, ■contain all the stipulations of the parties, and form the law which should govern.” The contention, therefore, relates rather to the facts which have been made to appear by the complaint and corroborative affidavit made by the plaintiff, and upon the answer •and affidavit of the secretary of the exchange.

Were the facts such as contended for by the plaintiff, that under the power vested in the exchange, it had upon the suspension of Soutter sold the seat, then unquestionably, the rights of the plaintiff having become fixed and vested should be governed by the then existing provisions of the constitution of the exchange respecting the rights of members who were creditors in and to "the proceeds of a seat sold belonging to a member who had been ■suspended. It has been made to appear, however, that although the exchange suspended Soutter, that his seat was not thereupon .sold, but, on the contrary, he continued to be a suspended member of the exchange for some years thereafter and until his death.

If by the rules of the exchange it became the duty immediately upon the suspension of a member to sell his seat and distribute the proceeds, then the contention of the plaintiff would again be •sound as to the rights of the plaintiff having become fixed and vested upon such failure and suspension. It will be seen, however, by a reference to § 4 of article 14, relating to suspended members, etc., that, “ The governing committee may, by a vote of two-thirds of the members present, extend the time of settlement for periods not to exceed one year. If, however, after the expiration of the time granted, said suspended member shall not make application for a further extension of time, or if making ■•such application, the same shall be refused, his membership shall be disposed of as provided in the first part of this section.” " The governing committee, therefore, had the right to extend the time of settlement for periods not to exceed one year, and were not ■obliged by any provision of the constitution to sell the seat of the member immediately upon his insolvency or suspension.

It thus appears that in the exercise of such right, that the periods were extended and 'the seat not sold until his death, which occurred in 1891. Subsequent thereto the membership was sold and the creditors, including the plaintiff, were summoned and appeared and presented to the committee of the exchange their claims. The committee thereafter proceeded to pass upon the same, allowing some and disallowing others, among the latter being the claim of plaintiff.

Section 4 of article 13 of the constitution provides‘‘when a member dies, his membership may be disposed of by the committee on admissions; and after paying the claims of the mem bers of the exchange, as allowed by said committee on admissions,., it shall pay any balance to the legal representatives of the deceased.” •

It being apparent that the exchange did not exercise its right, to sell the membership on account of the suspension, but having-allowed that to continue until death, when the membership was. sold, that the rights of the parties were fixed and determined in. the proceeds of the sale when made, which was after the death of Soutter, and that the rights of creditors in respect thereto were to be adjusted in accordance with the provisions of the constitution relating to the distribution of the proceeds of the sale after the death .of a member.

Upon the facts therefore, and the law applicable thereto, we think that the injunction was properly vacated, and that the order appealed from should be affirmed, with costs.

Yan Brunt, P. J., concurs.


text:
    Sarah F. Blake, App’lt, v. Alfred C. Barnes et al., Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed March 31, 1892.)

    Executors and administrators—Accounting—Jurisdiction.
    In an action brought in the supreme court by a legatee and devisee' against the other legatees and devisees named in the will, the executors., thereof, and the surviving partners of testator’s firm, for an accounting and construction of the will, it was decided, on sufficient and competent evidence, that neither the plaintiff nor the executors had any valid claim • against said firm, and that said firm made no claim against the executors founded on matters alleged in the complaint or reply. Held, that as nothing remained of the controversy but the ordinary settlement of executors’' accounts, it was proper to dismiss the complaint without prejudice to and with express leave to proceed for an accounting in the surrogate’s court.
    Appeal from judgment of the special term dismissing plaintiff’s complaint on the merits.

      O. B. .Smith, for app’lt; F. B. Candler and B. W. Candler,. for resp’ts.
   O’Brien, J.

The action was brought by the plaintiff, one of the ten children of the testator, A. S. Barnes, deceased, against-her brothers and sisters, and the children of a deceased sister, the executors under the will, and the surviving partners of A. S. Barnes & Co., for an accounting and construction of the will.

The complaint and the relief demanded are predicated upon plaintiff’s right to have an accounting from certain of the defendants as executors, and from certain of the defendants as surviving partners of the testator. Thus she presented by her complaint four contentions, one in respect to that firm of Barnes ¿p Co., one in regard to the release of certain real property, one in reference to certain engines and boilers in the Brooklyn factory, and one in reference to the amount of the claim against the firm of Knight, Uoomis & Co., in favor of the testator’s firm, and some minor matters presented by her reply to the executors’ answer.

The scope of the complaint and the theory of the action seem to recognize the rule of Jaw now settled, that in ordinary cases of administration and where the powers of the surrogate are adequate Ao the settlement of the estate, a court of equity may decline to interfere. As stated, however, in Bedfield on the Law and Practice of Surrogates’ Courts (4 ed. p. 10), “ there are many eases in which by reason of the necessity of preserving the relief by injunction or in consequence of a dissension between executors or because questions of individual rights or questions which the surrogate is not authorized to determine are inseparably connected with and involved in the controversy, ■ or because the estate or executor is foreign, a clear case of necessity for the interposition of a court of equity is presented. The surrogate, however, so far as he has jurisdiction, has. jurisdiction concurrent with that of a court of equity, and a court of equity will not, without some special ground, interfere to supersede the exercise of the surrogate’s powers.”

• Under this rule as enforced by the decisions in this state, if this action had been one simply for an accounting by the defendant executors no question could arise as to the right of the trial •court to decline to grant the relief asked for, viz: an accounting; for this would properly be a subject for investigation and determination in the surrogate’s court.

By reason however of the contentions which have been referred to, it is insisted that in respect to the accounting asked for special facts are shown which demand that a court of equity should ■assume jurisdiction, and under the settled rules of that court where it assumes jurisdiction for one purpose it will continue to act until all the questions at issue between the parties have been adjusted and settled in such an action.

As shown by his opinion, the learned trial judge, without •determining the question of the jurisdiction of the surrogate upon the special facts set up in the complaint, decided to try all the questions and hold the case for an accounting in the event of the •evidence disclosing any facts or questions which could not be passed upon by the surrogate. After taking testimony upon the questions presented, and having reached the conclusion that the plaintiff wholly failed to establish the claims thus made, the •learned judge dismissed the complaint on the merits upon the ground that none of the questions could be resolved in plaintiff’s favor and therefore no question was presented requiring the intervention of this court.

The reasons are thus stated in the opinion of the court: “ It is not enough to allege special facts which would oust the surrogate and j ustify resort to our jurisdiction. Such facts must be true and must be established by competent testimony. The rule cannot be evaded by the mere assertion. * * * It is urged that these matters should not now be passed upon, but that the accounting should be directed before a referee and all claims reserved until the final hearing on the referee’s report. This argument overlooks the rule that an accounting should not be ordered ■until special facts which justify the passing by of the surrogate’s court are established.

If any such fact is established then the court as a court of equity will assume jurisdiction of the estate and of the general accounting. It will not limit the relief to the single fact which appropriately brought the case within its jurisdiction. Having commenced, it will proceed to the end and do all that justice requires.”

We concur in the conclusion thus reached, as these views seem to be in consonance not only with the law and practice as applicable to courts of equity, but are supported by the cases referred to by the learned judge. Hard v. Ashley, 117 N. Y., 606; 28 St. Rep., 601; Chipman v. Montgomery, 63 N. Y., 222. Hor is it necessary for us, in view of the careful examination and review of the testimony made by the trial judge which supports his conclu sions as to those special facts, to again go over the record for the-purpose of pointing out the evidence upon which such conclusions are based. They fully appear in his opinion, and are clearly set forth in the findings of fact and conclusions of law which are part of the judgment appealed from.

The single question remaining is as to the ¡right of the plaintiff to insist upon an accounting from the surviving partners of the testator.

Our attention is called to the fact that the surrogate’s court has. no jurisdiction over the settlement of partnership accounts for the reason that the partnership effects are not assets of the testator.

It is true that a court of equity has exclusive jurisdiction to-adjust partnership accounts between the surviving partners and the representatives of a deceased partner, and the surrogate’s court has no jurisdiction in such cases ; and precedents can be found for an action brought in the capacity in which the plaintiff brings it. here by a bill against thea executor for an account in which the surviving, partner or partners can be joined as parties defendant, in order to have a full account of all the personal assets at the-same time, even where there was no charge or proof of collusion. Although it be conceded that a court of equity has exclusive jurisdiction to adjust partnership accounts, and though it-be conceded that facts might be presented in which a residuary-legatee or person interested under the will of a deceased partner might have a right in a suit against executors for an accounting to join the surviving partners, the question still remains-whether the facts alleged in the complaint and the proofs as presented upon the trial made out such a case as entitled the plaintiff to an accounting as against all the defendants upon this ground.

It would seem to be reasonably clear that in the absence of any special circumstances, as the executors are trustees and act for the personal representatives, that the right to maintain such an action first devolved upon them; and it is only where they have refused, or where their position is so inconsistent that injury may result to the personal representatives, that a right as against the surviving partners can be made the basis of an action by a legatee. Were this otherwise surviving partners would be liable to-an action for an accounting brought not only by the executors, but by every other person interested in the estate, thus entailing, without any fault on their part, unusual hardship and expense on such surviving partners.'

It is true that the plaintiff makes certain allegations to which testimony was directed for the purpose of showing that the surviving partners, by reason of the fact that certain of them were also executors under the will, were not the proper ones to maintain such an action for an accounting. But the difficulty with the plaintiff's position is that the evidence did not come up to the point of sustaining any of the claims made. She failed to establish that any claim was made by the defendants who constituted' the firm of Barnes & Co., whatever, as to the assets of the testator, or any claim, whatever, which would entitle her to pass over the surrogate’s court, and ask in this court for a settlement of the accounts of the executors.

It appears that as early as January, 1889, eight months before this action was commenced, an accountant had been employed by the executors at the request of the plaintiff, who had in the manner provided by the articles of copartnership ascertained and fixed the amount of the capital and all the interest of the testator in' the business and assets of said firm, and that after the plaintiff and all parties interested had accepted this report, the firm paid to the executors the amount found due, namely, $485,191.86; and that there was no claim made by the executors against the firm and none made by the firm against the executors.

Upon these facts being shown, the trial court having passed adversely upon the special facts alleged in the complaint which were relied upon for the purpose of clothing this court with jurisdiction, it was justified in refusing to proceed further.

In addition to the evidence presented by the record, the plaintiff sought to elicit more in respect not only to the administration of the estate by the executors, but also as to the disposition of the assets of the firm- by the surviving partners. This, because of its irrelevancy to the special facts referred to, was excluded; and the exceptions thereupon taken are now relied upon as grounds for reversal, and as bearing upon that part of the judgment which determines that the trial already had shall be res adjudicata upon the questions passed upon.

This portion of the judgment presents the most serious question upon this appeal. It-is true the plaintiff was permitted to present evidence to sustain the special facts relied upon, but some of the testimony excluded had bearing upon the conduct and management of the estate and of the assets of the testator by the defendants. The inquiry which engrossed the attention of the trial judge was directed to the ascertainment of the question Whether or not the court should assume jurisdiction; and it proceeded properly in that direction in undertaking to decide the special facts upon which such jurisdiction was alleged to be founded. Having concluded that the court should not entertain jurisdiction by reason of the failure of proof, it seems to us that the proper disposition would have been, not to have dismissed the complaint, on the merits, nor by adjudicating upon these special facts to conclude the plaintiff from having a full and complete accounting before the surrogate, but that the judgment should iave been for a dismissal of the complaint without prejudice to any proper proceeding which the plaintiff might institute in the surrogate’s court for an accounting.

In this respect we think the judgment should be modified. But upon the other questions presented, as the trial court on sufficient and competent evidence decided that neither the plaintiff nor the executors had any valid claim against the firm of A. S. Barnes & Co., and that the firm made no claim against the executors founded on any of the charges in the complaint or reply, and that as nothing remained of the controversy but the ordinary settlement of executors’ accounts, the complaint was properly dismissed and so much of the judgment appealed from should be affirmed. No costs to either party on this appeal.

Van Brunt, P. J.—The judgment should contain leave to proceed before surrogate. As thus modified I concur in affirmance.

Patterson, J.—With the modification suggested by the presiding justice I concur in affirming the judgment


author: Per Curiam.

text:
    Joseph Oppenheimer, App’lt, v. The Manhattan Railway Co., Resp’t.

      (Supreme Court, General Term, First Department,

      Filed March 31, 1892.)

    1. False imprisonment—Malicious prosecution—Railroad.
    Plaintiff was arrested by a police officer on a charge made by one oí defendant’s employees, and was taken before a magistrate and convicted. Meld, that there could be no cause of action in such a case for malicious prosecution or false imprisonment.
    3. Railroad—Assault—Ejection of passenger from moving train.
    An employee of a railroad has no authority forcibly to remove a passenger from the train while it is in motion, and for any injury resulting from such a removal the company is liable.
    Appeal from judgment entered on dismissal of complaint at circuit.

      M. L. Townsend, for,app’lt; Davies & Sapallo, for resp’t.
   Per Curiam.

The complaint appears to join an action for an assault by one of the defendant’s employees, an action for malicious prosecution and an action for false imprisonment.

It appeared that the plaintiff was arrested by a police officer on a charge of one of the employees of the defendant, and was subsequently taken before a magistrate and convicted of the charge. There can, therefore, be no cause of action for malicious prosecution or for false imprisonment; as the prosecution could not be malicious, the plaintiff having been found guilty of the charge ; and there was no false imprisonment because the plaintiff was not imprisoned by the defendant, but was arrested by a police officer and imprisoned by the public authorities, and tlie charge for which he was imprisoned was proved.

It appears, however, that the plaintiff alleged that after he boarded the train, and after the train had started, he was forcibly removed by one of the defendant’s employees, acting under its authority, from the train. We think this removal was under the,. circumstances illegal. While the defendant’s right to make such reasonable rules and regulations as are necessary for the government of its passengers is unquestioned, and while the employees of the defendant would have been justified in using force to restrain the plaintiff from getting upon the car, or would have been justified in stopping the train and removing the plaintiff from the ' car after he had forced his way on, upon the ground that he had not paid his fare for a trip down town ; but he being on the train and the train having started, the defendant’s employee had no authority forcibly to remove him from the train while it was in motion. It has been held to be contributory negligence for a passenger to attempt to alight from a train while in motion. And it is clear that for any injury resulting in consequence of the forcible eviction of a passenger from a train in motion the defendant would be liable.

The fact that no special injury was occasioned by the unlawful, act of the employee in ejecting from the train would not justify' a dismissal of the complaint

The plaintiff was entitled to recover such damages as the jury should allow for the unjustifiable assault, subject to the power ' of the court to set aside the verdict in case it should be excessive.

We think, therefore, that the judgment must be reversed and a new trial ordered, with costs to the appellant to abide the event-

Van Brunt, P. J., O’Brien and Ingraham, JJ., concur.


text:
    Morris H. Brown, Resp’t, v. Richard B. Wigton et al., App'lts.

      (Supreme Court, General Term, First Department,

      Filed March 31, 1892.)

    Attachment—Vacation.
    Where the facts are not undisputed or the legal conclusions certain, a motion to vacate an attachment will not be granted. In such case it is not necessary that plaintiff produce rebutting affidavits; but it is sufficient to defeat the motion that the allegations of the complaint dispute the defendant’s affidavits.
    Appeal from order denying motion to vacate warrant of attachment

      J. M. Hunt, for app’lts; Strong & Oadwalader, for resp’t
   Per Curiam.

This action was brought to recover for alleged services rendered by the plaintiff to the defendants; and upon the ground of the non-residence of the defendants, an application was made for an attachment against the property of the defendants, which was granted. The defendants thereupon made a motion to vacate the attachment upon the ground that the plaintiff had no cause of action. This motion was denied, and from the order thereupon entered this appeal is taken.

It is urged that as the plaintiff produced no rebutting affidavits, but merely relied upon the allegations of the complaint, and as it was unreasonable to suppose that the defendants would have made the contract alleged in the complaint, that, therefore, the motion should have been granted.

We do not see how the court is to try the merits of the action upon an application to vacate an attachment

The rule is well stated in the case of Lowenstein v. Salinger, 42 St. Rep., 414, that ordinarily the court will not upon motion try questions regarding the cause of ■ action which .should properly be left for determination upon the trial, Where, however, the facts are undisputed, and the legal- conclusions certain, it would be oppressive to hold an attachment which is clearly without foundation.

In the case at bar the allegations of the complaint dispute the affidavits furnished on the part of the defendant, and, therefore, the case is not brought within the rule above stated.

We think that the merits of. the controversy must be left until the trial, the plaintiff, if having a cause of action, being entitled to his attachment as a matter of right

The order should be affirmed, with' ten dollars costs' and disbursements.

Van Brunt, P. J., and O’Brien, J., concur.


author: O’Brien, J

text:
    The People ex rel. The Savings Bank of New London, App’lt, v. Michael Coleman et al., Com’rs, Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed March 31, 1892.)

    1. Taxes—Foreign savings banks—Shares of national banks.
    Shares of stock in New York national banks held by a foreign savings bank may be taxed here, even though such bank can show an exemption of its property accorded by the statutes of the state in which it is situated.
    2. Same—Deductions.
    Though the amount of assets necessary to pay depositors is exempt from taxation, such assets cannot be entirely disregarded in determining what part of the property of .the bank can be taxed, and the bank allowed to offset the entire amount of its liabilities against the stock held by it.
    3. Same—Discrimination.
    To entitle a party to relief on the ground of discrimination, the extent of such discrimination should be shown.
    (Patterson, J., dissents.)
    Appeal from orders upon certiorari to review decision of tax commissioners.

      S. B. Brownell, for app’lt; George S Coleman, for resp’ts.
   O’Brien, J

This appeal presents the question whether it was error upon the part of the tax commissioners to assess shares held by relator in New York city national banks for taxation in 1890 to the amount of $92,464.

' The facts, as they appear from the petition and return to the certiorari, show that the relator and appellant is a corporation created by and under the laws of Connecticut. On the second Monday of January, 1890, the relator was the owner of certain shares of stock in various banks located in the city of New York, and was assessed for taxation as a stockholder in the aggregate sum of $156,284.

The relator having applied for a cancellation of the assessment, the tax commissioners considered it and took evidence concerning the property of the savings bank, ascertaining among other things the following facts: that the relator was a moneyed and business corporation, organized and doing business as a savings bank, in and under the laws of the state of Connecticut, and that it had no office nor business nor tangible property within the ciiy or state of New York; that the gross assets of,the relator amounted to............................... $4,611,798 64 and its liabilities were........................ 3,675,159 59

Leaving a gross surplus of.................. $936,639 05

After deducting from this gross surplus an amount representing all propei'ty of the relator not liable to taxation, or taxable elsewhere than in New York city, or real estate, which deduction aggregated.................................. $743,772 34 there remained a net surplus of................. 192,866 71

The difference between the actual value of shares assessed..................................... $256,462 50 and the net taxable surplus of the relator........ 192,866 71

is.........'............................... $63,595 79

The difference between the actual value of the stock of the bank shares and the assessed value thereof is explained by the fact that pursuant to the provisions of § 312 of chapter 409 of the Laws of 1882, a deduction is required to be made from the actual value, in order to determine. the assessed value; deducting from the original valuation.................... $156,284 00 the excess of valuation....................... 63,595 79

Leaving a taxable balance of................. $92,688 21

This amount is slightly in excess of the aggregate assesssment actually imposed upon the relator, which as we have stated, was......................................... $92,464 00

The tax commissioners also ascertained that the relator had no capital stock so called, and was neither taxed nor taxable in Connecticut on the value of its assets, for local purposes, but was taxable in said state on its corporate franchises only; that in the assessment and taxation of bank shares, and other forms of personal estate, in the state of Connecticut, no deduction is by-law allowed for the debts of the owner of such property. The relator claims that the decision of the assessors was erroneous and illegal, upon the following grounds:

First. That the relator, being a savings bank, is exempted by the laws of the state of New York from taxation on its personal property, including its bank shares.

Second. That the assessment is not authorized by the federal law under which the national banks were incorporated, nor by the laws of New York, because the debts of the relator should have been allowed or offset against the assessment of its national bank shares.

These grounds were held by the learned judge at special term to be untenable,.and we see no ground for disturbing the conclusion thus reached. In overruling the first position taken by the appellant, that savings banks are not wholly exempt from taxation under the laws of the state of New York, the learned judge referred to the case of The People ex rel. Ithaca Savings Bank v. Beers, 67 How. Pr., 225, which fully considers this question, and with the reasoning thereof we are entirely satisfied.- In’that case, after examining thb statutes in reference to savings banks, it was held that the property in the hands of a savings bank might be taxed in this state after deducting, first, the amount of all the just debts owing by it, and second, the amount of its assets actually invested 'in United States securities. Even though the relator could show an exemption of property, accorded by the statutes of' Connecticut, this would not avail to exempt such property in the slate of New York. Catlin v. Trustees of Trinity College, 113 N. Y., 142; 22 St. Rep., 189.

In support of the second ground urged by appellant, it is insisted that the commissioners’ refusal to allow the debts of the relator to offset or go in reduction of the assessment of it as a stockholder in the National Bank was illegal and erroneous, and against both the federal and state law.

It is a little difficult for us to follow the process of reasoning by which any such deduction can be made, based on the action of the commissioners. Their return shows, that taking all the assets of the bank,.and deducting, therefrom all the liabilities of every kind, there remained a.gross surplus which, in part, consisted of real estate and property not liable to taxation, or taxable elsewhere than.in New York city, which was deducted for the purpose of ascertaining the net surplus.

It was by following this method, as we have seen, of allowing the debts and liabilities to be offset against the assets, that the balance was reached. Appellants cannot seriously urge that because the amount of assets necessary to pay depositors is- exempt from taxation, that in reaching a conclusion as to what property of a savings bank can be taxed, that the assets are to be entirely disregarded, and against any particular piece of property or asset otherwise liable to taxation the bank shall be entitled to offset the entire amount of its liabilities. This in effect and in substance would be to exempt banks from all taxation upon any and all property, which, as we have seen, is not the law in this state, because it is hardly conceivable that any bank actively engaged in business could not at all times present a statement of liabilities in the shape of the amount due depositors, if nothing more, which would exceed a particular class of property or a particular asset sought to be taxed. We agree with appellants, that no assessment for taxation upon national banks, or the holders of their stock, can be laid except in accordance with the terms of the federal law, and that one of the conditions or limitations imposed by that law is that the taxation shall not be at any higher rate than that imposed upon money capital in the hands of individual citizens.

The question remains, however, has the federal statute been violated ?

The laws of this state governing the taxation of bank stock have been upheld by the suéneme court of the United States, and we must therefore regard that question as settled. Mercantile Bank v. State of New York, 121 U. S., 138; Palmer v. McMahon, 133 id., 660.

;■ By referring to the provisions of our state law with respect to ! the taxation of bank stock, chapter 409 of the Laws of 1882, it will be found that they correspond with the requirements of the federal laws, and make provision for the two restrictions placed upon the right to tax as found in § 5219 of the Bevised Statutes of the United States, which is the authority under which the several states assessed bank stock of the national banks, i This statute appellant insists has been violated by a discrimination made against it, but it nowhere affirmatively appears what, if any, is the extent of such discrimination, and this should affirmatively appear to entitle the relator to any relief by the court based on such a ground. Not only does appellant claim such discrimination, without any proof to support it, but it was further urged that the learned court below fell into an error in stating that the commissioners “ pursued the same course as is required by law in the case of an individual or domestic corporation.” It has not been pointed out to us what portion of this statement is error, nor has it been suggested in what respect the treatment accorded to the relator was different from that which was accorded and extended to citizens or corporations of this state.

We might present the question in another view, viz.: if it had been shown that some method other than the one pursued towardst-the relator had been adopted in reference to New York banks or citizens, a ground of complaint might be present. We feel satisfied however, upon examining all the proceedings of the commissioners, that if the relator were a New York savings bank, the assessment made could not be successfully assailed on the ground of illegality or error.

Stocks held by savings banks are not to be accorded the exemption granted by the Bevised Statutes to stocks owned by the state or by literary or charitable institutions, because the statute expressly exempts the latter institutions.

Apart from those reasons already alluded to, the case of the Bank of Redemption v. Boston, 125 U. S., 60, is a seeming authority for the proposition, that even if a savings bank as such were not taxable under the laws of this state on its deposits and accumulations, it would be liable as a stockholder in a national bank without regard to the ownership of the shares.

It is unnecessary for us to consider seriatim the other arguments advanced by the appellant, as they have been fully met and ably answered by the respondents in a brief which disposes of every question presented by appellant on this appeal.

Upon an examination therefore of the- entire record, it not appearing that the action of the commissioners was either illegal or erroneous, we think that the order appealed from should be affirmed, with costs and disbursements.

. 'Yak Brunt, P. J., concurs in result; Patterson, J., dissents.


text:
    Robert L. Mordecai, an Infant, Resp’t, v. Dyer Pearl et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed March 31, 1892.)

    Infancy—Rescission of contract—Stocks.
    Plaintiff deposited a sum of money as margin for transactions in stocks. In an action to recover said money, it appeared that he had not received the stocks or anything except notices of their purchase and sale. Held, that as plaintiff had received no benefit from the transactions he" cóuld not be required to restore anything as a condition of maintaining the action. The orders for the purchase and sale of stock having been repudiated on the ground of infancy must be regarded, so |far as they affect his legal rights, as though they had never existed.
    Appeal from judgment entered on report of referee.

      W. D. Leonard, for app’lts; A. J. Simpson, for resp’t. • ,
   Per Curiam.

It is conceded by the appellants that the plaintiff, an infant, had a right to recover the money deposited by him with the appellants on his returning to the appellants all that he had-received under the contract.

It does not appear, however, that the infant has ■ received anything under this contract except the notices of the purchases and sales of the stock, made by the defendants for his account He certainly never received any of the stock alleged to have been purchased for him, nor the proceeds of the sales of any of the stock alleged to have been sold for his account, and as the notices of purchase and sale of stock do not appear to have been of any special value it is difficult to see that any advantage would be derived by the defendants if he had returned or offered to return them.

The plaintiff, an infant, deposited with the defendants a sum of money belonging to him, and he now seeks to recover that sum of money. The defendants claim the right to retain it to satisfy an indebtedness which they claim exists in their favor, arising out of transactions. in stocks which they claim were authorized by the i nfant. The infant never received the stocks or their proceeds. He has received no benefit from any' of the transactions made by the defendants for his account, and to ask him to return to the defendants stocks which have never been in his possession, but which have always been in the possession of the defendants and been disposed of by the defendants, would be asking him to per-. form an impossibility.

As was said in Green v. Green, 69 N. Y., 553: “ The right to rescind is a legal right established for the protection of the infant, and to make it dependent upon,'performing an impossibility, which impossibility has resulted from acts which the law pre•sumes him incapable of performing, would tend to impair the right and withdraw the protection. Both upon authority and principle we think a restoration of the consideration could not be exacted as a condition to a rescission on the part of the defendant.”

The case of Heath v. Mahoney, 12 W. Dig., 404, is an express authority for the proposition that in the consideration of the rights of the parties to this action, the orders for the purchase and sale of stock given by the infant having been effectually repudiated on the ground of infancy, they must be regarded, so far as they affect his legal rights, as though they never had any existence.

We think, therefore, that the judgment was right and should be affirmed, with costs.

Tan Brunt, P. J., O’Bbien and Ingraham, JJ., concur.


text:
    The People ex rel. Horace M. Lower, Resp’t, v. Timothy J. Donovan, Impl’d, App’lt.

      (Supreme Court, General Term, First Department,

      Filed March 31, 1892.

    1. Service—Election day—Mandamus.
    Section 4 of chap. 130, Laws 1843, prohibiting the service of civil process on an elector on election day, Was intended to preserve the rights of an elector, and does not apply to a process or proceeding against a board or chairman thereof having public duties to perform, as an inspector of election, and does not prevent service on him of a mandamus requiring him to permit a relator to vote.
    3. Same.
    Section 5 of said act relates to the sessions of courts anfl the organization thereof on election day, and does not interfere with the power of tdges to grant remedies that they have the right to grant irrespective of he statute, and does not appy to an application for a mandamus to a judge in the first judicial district.
    .‘3. Same—Surplusage.
    An alternative mandamus required the defendant to. appear before the judge granting it at “ special term " at chambers. Held, that the use of the words “ special term” was surplusage.
    •4. Same—Clerk.
    The provision of the statute requiring the clerk’s office to be closed on election day does not prohibit his sealing and attesting an order granted by a judge on that day.
    Appeal from order convicting the appellant Donovan, an in:spector of election, of contempt.
    P. V. R. Van Wyclc (Henry Grasse, of counsel), for app’lt; David Leventritt and Charles H. Knox, for resp’t
   Per Curiam.

At the election on the Sd of November, 1891, the appellant was the chairman of the inspectors of election in the .•seventh election district of the second assembly district. On that •day an order to show cause was granted by a justice of this court, returnable at a later hour of that day, why a peremptory writ of mandamus should not issue commanding the inspectors to allow •She relator to vote. This order was served, and upon the return, the appellant not appearing, a peremptory writ was granted. Notwithstanding the service of the peremptory writ, the appellant, subsequently refused to permit the relator to vote, and he relies-on this appeal upon several grounds in justification of his willful disobedience of the order referred to.

The question now before the court is not as to whether, if contested, the writ of mandamus would or would not have been granted.

The writ was granted, allowed by the justice, signed by him and by the county clerk, duly served and willfully disobeyed.

There is, therefore, but one question which needs our consideration, and that is whether the writ itself is void. And to show this the appellant relies upon two grounds: First, the statute-which provides that no civil process or proceeding in the nature of civil process shall be served on an elector- entitled to vote in any city or town on the day on which such election shall be had,, chap. 130, Laws of 1842, § 4, title 1; 1 Rev. Stat., 6th ed., 427;; and, Second, § 5 of the same statute, which provides that no court, shall be opened or transact any business in any city or town on the day on which such election shall be held therein, unless it be-for the purpose of receiving a verdict or discharging a jury.. * * * But this section shall not prevent the exercise of jurisdiction of any magistrate when it shall be necessary in criminal, cases to preserve the peace or to arrest offenders.

In reference to the first section (§ 4, sup.), it need only be said that that does not apply to a process or proceeding directed against, a board or a chairman thereof having public duties to perform, such as was the position occupied by the appellant in the case at. bar, but was intended to preserve the rights of an elector, and is-expressly referred to as such in the title, § 4 being “ Priyileges of" Electors.”

As to § 5, under which it is insisted by the appellant that there? is no power in the court or a justice of the supreme court to grant, or issue a mandamus on any day on which a general election is held in this state. The answer to that proposition is that § 5-does not affect the power of a judge at all. It merely prescribes that no court shall be opened or transact business in any city or town on the day of such election unless for the purpose of receiving a verdict, etc.

It merely related to the sessions of courts, and to the organization of courts on election day, and does not interfere with the-power of judges to grant remedies that they have the right to-grant irrespective of that statute.

By express provision of the Code, § 770, in the first judicial district, a motion which elsewhere must be made in court may be-made to a judge out of court except for a new trial on the merits.. Section 768 defines what a motion is, viz: an application for an order is a motion. Section 767 defines what an order is, viz: a-, direction of a court or judge made as prescribed in this act, in-an action or special proceeding, unless it is a judgment, is an order.

Therefore the application for a mandamus is a motion and the issuing of the mandamus is an order under the definition .of the Code.

But it may be said that § 2068 takes the application for a mandamus out of the general provision of § 770 before referred to; which is, that except where special provision is otherwise .made in this article a writ of mandamus can be granted only at ■a special term of the court. The exception in regard to the special provision, it is to be observed, is an exception in favor of an application to the general term under certain given circumstances.

Therefore it is apparent that anywhere except in the first judicial district an application for a mandamus must be made at a special term. But it is clear that it was not the intention of the legislature to restrict or to vary the practice in reference to applications which may be made out of court in the first judicial district; and in this particular instance to restrict the power of ■ the judge. It was the policy of the legislature to give the judges in the first judicial district all the powers of a court without the formality of being in court. Hence the provision that a motion which elsewhere must be made in court may be entertained by a judge out of court in the first judicial district It seems, therefore, to follow that the provisions of the statute respecting the holding of courts have no application to an order which may be made by a judge in the first judicial district out of court.

It may be said, however, that the order to show cause which was issued and which formed the foundation for the allowance of the" mandamus was made returnable at a special term of the court.

The language of the order required the respondent “ to show cause before me, at a special term thereof to be held at chambers in the county court house." It is apparent that the use of the words “special term" was surplusage, for the reason that the order is returnable before the magistrate or judge who granted -the order, and before him individually. It was evidently not intended to be made before- the court, because the court is the same whether held by one judge or another. Therefore, the order to show cause was returnable before the judge, and the mandamus was issued by the judge, and the prohibition heretofore spoken of clearly does not apply.

It is, however, insisted that the writ is void because the county clerk had no authority to seal the writ, it being provided that the county clerk’s office shall "be closed on that day. This is true as to ordinary business to be done in the office of the county,clerk; but where a judge has the power to issue a writ which requires the seal of a particular officer, he certainly has the power to make it effectual by procuring it to be properly sealed and attested by ■the clerk. It is to be observed that nothing is said in regard to the county clerk not acting as clerk, but simply that the county clerk’s office shall be closed.

- Having examined the questions presented, we find no reason for disturbing the conclusion reached by the judge below, and the order should therefore be affirmed, with ten dollars costs and disbursements.

Van Brunt, P. J., O’Brien and Patterson, JJ., concur.


author: Van Brunt, P. J.

text:
    Charles E. Gardner, Resp’t, v. The C. B. Keogh Manufacturing Co., Impl’d, App’lt.

      (Supreme Court, General Term, First Department,

      Filed March 31, 1892.)

    Fraudulent conveyance—Parties—Stockholders.
    The complaint in an action to set aside transfers of property by a firm composed of the individual defendants to a corporation as fraudulent and void as to the creditors of said firm, also alleged that the individual defendants, in pursuance of their fraudulent scheme, had transfeired stock of such corporation to persons vrho were not bonajide creditors of the-firm, and whose claims were much less than the stock. Held, that as the-only relief demanded was in respect to the property fraudulently transferred to the corporation, and not in respect to the stock, the stockholders-were not necessary parties to the action.
    Appeal from interlocutory judgment overruling demurrer to-the complaint.
    Ü7. J. Meyers, for app’lt; M Kent, (A. H. Joline, of counsel), for resp’t. ' ■
   Van Brunt, P. J.

This action was brought by a judgment, creditor of the individual defendants -composing the firm of 0. B. Keogh & Co., against such individual defendants and the C. B. Keogh Mfg. Co. to set aside as fraudulent a transfer or conveyance of certain property belonging to said firm, made by said firm to the ■ defendant, the C. B. Keogh Mfg. Co. The defendant corporation interposed a.demurrer upon the ground that it appeared upon the face of the complaint that there was a defect of parties defendant.

The complaint alleges among other things that the property in question was transferred to the corporation, and was accepted by the corporation, with intent to hinder, delay and defraud the just-creditors of the firm of C. B. Keogh & Co.

It then further alleges that the individual defendants in pursuance of the scheme or plan aforesaid transferred and delivered a large amount-of the capital stock in said corporation to divers-persons who were not and are not hona fide creditors of said firm,, and whose claims and demands against said firm were much less, in amount than the value of said stock, so delivered, and that, said transfer or delivery was made in pursuance of said scheme-- and with'intent to hinder, delay and defraud said creditors, and. particularly the plaintiff.

It is urged that because of this allegation the persons to whom this stock was delivered are necessary parties to this action because it is claimed their holdings are assailed as being fraudulent.

If this were true, and if the plaintiff was desirous of reaching the stock in question, the claim would be well-founded. But it. appears upon an inspection of the complaint that the plaintiff is not at all interested in or desirous of securing any part of the stock of the defendant company; and that all that this allegation was intended to aver was fraudulent practices upon the part of the individual defendants' in connection with their dealing with the corporation. The allegation in question was probably entirely unnecessary. All that the plaintiff seeks to recover is property the ostensible? title to which is in the defendant corporation, and they allege a fraudulent scheme between the individual defendants and. the-corporation, and then for the further purpose of characterizing: the fraudulent character of the action of .the individual defendants they alleged that they transferred the stock they received, from the corporation to persons without an adequate consideration.

All the relief demanded is in respect to the property transferred by the individual defendants to the corporation. Stockholders as such do not own the property of a corporation and are-not necessary parties in an action brought to affect the title to-property held by the corporation. Hence the stockholders were-not necessary parties to the action, nor was the allegation contained in the complaint necessary in order that proof of fraudulent acts upon the part of the defendants might be offered.

■ We are. of opinion, therefore, that the demurrer was rightly overruled and the judgment should be affirmed, with costs, with, leave, however, to the defendant to answer on paying the costs of the demurrer upon this appeal and the costs of the court below within twenty days after entry of order hereon.

O’Brien and Patterson, JJ., concur.