author: Osborn, J.: Learned, P. J. (dissenting):

text:
    GEORGE R. BIXBY, Appellant, v. FRANCES S. BARKLIE and WASHINGTON A. COSTER, Respondents, Impleaded with JOHN L. BARBOUR.

      Property held for the benefit of sureties — when they a/i'e released by the failure of the ' trustee to hold it.

    December 19, 1871, Stephanie Barbour, John L., her husband, F. S. Barklie and W. A. Coster ‘executed a bond to one Jenett M. Clark, to secure outstanding notes signed and indorsed by the obligors. The debts were the individual debts of Stephanie, and Barklie and Coster signed only as sureties for her. Prior to that time Stephanie had executed a power of attorney to one Slocum, authorizing him to receive one-half of the annual income payable to her' each year during the term of her natural life by a trustee, and apply the same inpayment of her debts. This power of attorney continued in force until 1872, when Stephanie and Slocum agreed to and did revoke and cancel the same. Slocum knew of the relation existing between the parties. April 12, 1872, Jenett M. Clark assigned the bond to Maria B. Clark, who, on January 8, 1875, assigned it to Slocum, who, on September 18, 1879, assigned it to the plaintiff, who brought this action to recover the amount due thereon, Stephanie being then dead. * ■

      Held, that the plaintiff took the assignment from Slocum charged with all the equities which existed in favor of the sureties against Slocum.
    That the action of Slocum in surrendering and revoking the power of attorney, and neglecting to collect the amounts payable to him thereunder, released the sureties to the bond, so far as he was then, or by the assignment subsequently became, interested in the same, and that the action could not be maintained. (Learned, P. J., dissenting.)
    Appeal from a judgment in favor of the defendants, entered upon the report of a referee. The action was brought upon a joint and several bond executed by the defendants and one Stephanie Barbour, the wife of defendant John L. Barbour, since deceased, to one Jenett M. Clark, dated December 19, 1871, conditioned for the payment of $4,566 and interest in five years from the date thereof. The complaint alleges an assignment of the bond by Jenett M. Clark to one Maria B. Clark, by Maria B. Clark to one William Slocum, and by William Slocum to the plaintiff.
    It appeared that on the 20th day of November, 1865, the defendant John L. Barbour and his wife, Stephanie, executed and delivered to William Slocum an instrument or power of attorney, authorizing him to receive from Walter L. Livingston one-half of all moneys due on and after the first day tíf May, 1865, belonging to said Stephanie, or to the said John L. in right of his wife, until all debts owing by the said Stephanie on the 1st day of May, 1865, to all persons within the county of Saratoga, and all interest thereon should be fully paid. Slocum accepted the trust, and afterwards, on the 18th day of February, 1868, the said John L. and Stephanie executed to said Slocum another instrument, which was annexed to the first mentioned instrument, and provided for extending it to secure to Slocum such sums of money as he might after that date advance, in pursuance of the agreement mentioned in said instrument, and continuing the power of attorney to receive' from Livingston one-half of the income until the whole amount of moneys, which under such agreement should thereafter be advanced by said Slocum for the benefit of said Stephanie, and interest should be paid.
    . It appeared that thereafter the respondents made three promissory notes — the defendants Coster and Barklie signing as sureties — with said Stephanie, amounting in all to $3,600, which were indorsed by defendant John L. Barbour That when they became due Slocum informed the defendants that said notes were the property of Jenett M. Clark, and 'that for the purpose of extending the indebtedness and interest on said notes the said defendants made the bond set forth in the complaint as sureties only, and for the indebtedness on the notes and for no other consideration. Another power of attorney, dated December 18, 1871, was also given, reciting the former power of attorney; reciting that the sum of $3,600 mentioned m the power of attorney of February, 1868, had not been paid in whole or in part, and that sundry other sums of money paid and advanced by Slocum had not been repaid; that the said Stephanie was further indebted to sundry individuals in Saratoga county to the amount of about the sum of $6,000, and that the said Slocum had agreed to advance for the said Stephanie a sum not to exceed $6,000, and renew the power of attorney, to receive from Livingston one-half of the moneys belonging to said Stephanie, or to the said John L. in right of his wife, after such deduction as Livingston might be entitled to make for liens and expenses until all sums of money theretofore advanced by said Slocum to or for said Stephanie, and interest thereon, and all expenses properly incurred, and all such moneys as he might thereafter advance to the extent of $6,000 for paying said Stephanie’s debts, etc., should be fully paid or received by said Slocum. It. further appeared that up to the time of her death, July 5, 1876, the said Stephanie was entitled to, and ought to have received from said Livingston, who was her trustee, the sum of $8,100 or more, and that Slocum was entitled to receive the sum of $4,000 or more, annually; that on or about the 12th day of February, 1872, Slocum refused and neglected to make any further collection under said powers, and omitted to perform his trust; and on or about May 23,1872, wrongfully entered into an arrangement or agreement with said Stephanie, by. which he revoked the powers of attorney, and annulled and canceled the trust created by the several instruments, and neglected to protect the defendants in their rights under said instruments, and destroyed and deprived them of the power of protecting themselves thereunder. The defendants claimed that by reason of the premises aforesaid the defendants had lost their security, and that by reason of the negligent and wrongful acts of said Slocum the defendants had been injured to the amount of $7,000, or the amount due on the bond; wherefore the defendants asked that that sum be set off against the amount claimed in the action ; that they be adjudged discharged from the bond, and that as to the defendants the bond be delivered up and canceled.

      M. Hale, for the appellant.

      L. B. Pike (submitted), for the respondents.
   Osborn, J.:

This is an appeal from a judgment rendered in favor of the respondents, defendants, Barklie and Coster, upon a referee’s report, and also from a motion denying a new trial to the plaintiff upon the case as made and upon affidavits. This motion for a new trial was made at Special Term before Mr. Justice Landon, and, as we think, -properly denied. The only question to be considered then is, whether the referee made any mistake in his findings of fact or conclusions of law arising therefrom.

From a very careful examination of all the evidence in the case I am convinced that the indebtedness originally secured by note, and afterwards by the different bonds given, with the powers of attorney to Slocum, therein contained, all had reference to the individual indebtedness of Stephanie Barbour; that'the defendants, Francis S. Barklie and Washington A. Coster, had no personal interest therein; that they signed the notes originally, and the bonds, including the bond on which this action is brought, as sureties only, and that this was all the time well known to William Slocum, the plaintiff’s assignor. Stephanie Barbour during all this time had a life interest in the property and estate of another, of which one Walter Livingston was trustee, and from which she was entitled to receive the sum of $8,000 and over annually.

It would seem that her personal and living expenses were extravagantly large, and the object of the bonds, with the power of attorney therein contained, was to secure the indebtedness which existed against her by directing the trustee, Slocum, therein named, to draw from said Livingston one-half of her interest yearly, being the sum of $4,000 or over, and apply the same in payment of her debts, including the debts for which Francis A. Coster and Washington A. Coster were liable as sureties, first, on the notes which they had signed and which subsequently were merged in the bond in suit also signed by them as sureties. True, the bond in suit was not given to Slocum but to one Jenett AI. Clark, but the power of attorney to Slocum to receive this $4,000 annually and apply it to the debts of Stephanie remained in force as well as to this bond as to the original notes which respondents had signed as sureties. Indeed, the notes formed the consideration for the bond. In a word, while the obligee named in the bond was Jenett M. Clark, yet the bond was made up of the original notes signed by the respondents. To secure these, perhaps with other indebtedness of Stephanie, this power of attorney was given. This still remained in full force as a protection to the same sureties who signed the bond. This the referee finds, and there is evidence to support it as well as the fact that all this was well known to all the parties concerned.

Now, while this was the state of affairs, and in 1872, Airs. Barbour and her husband revoked, and Slocum consented thereto without the knowledge or consent of Barklie and Coster, this power of attorney, and from that1 time onward Slocum did nothing under such power of attorney and no money whatever was paid to the relief of the sureties.

After the revocation of the power of attorney and the giving up by Slocum of the trust and the surrender, of the security he held, he (Slocum) by assignment from the Clarks became the owner of this bond in suit. He subsequently assigned to the plaintiff. I think it clear that the plaintiff took the assignment from Slocum, charged with all the equities and defenses which existed in favor of the sureties against Slocum, if he had commenced an action on this bond and mortgage to recover during the time he held this bond. (Trustees, etc., v. Wheeler, 61 N. Y., 88; Davis v. Bechstein, 69 id., 440; see, also, opinion of the referee on that point.) The Clarks possibly could have recovered against the sureties on the bond, if the action had been brought by them, assuming the surrender and revocation were given up-and surrendered without their assent. When Slocum took an assignment thereof he then stood in the same position as he would if. the bond had not been given to him.

If such had been the case would • it not be clear that Slocum’s consent to a revocation of the power of attorney, his abandonment of his trusteeship and surrender of the security he held- for the benefit of the sureties, would have prevented his recovery? It seems to us most clearly so. The security by Slocum would have operated to their discharge. It was an instrument of such a nature that he could not surrender it. He held it as well for the benefit of the sureties as the obligee named in the bond, and he could not destroy it without the consent of the parties (sureties) for whose benefit it was given. ¥e find evidence sufficient to sustain such findings.

We think the action of Slocum operated to release the sureties to this bond so far at least as he had, or by the assignment to him afterwards, became interested in the same, and that the plaintiff acquired no other or greater interest or right than Slocum could enforce.

In this view it becomes unnecessary to examine the legal conclusion at which the referee arrived, that the action of Slocum created-a claim for damages by the sureties against him, and therefore could be set up by way of counter-claim to the cause of action alleged in the complaint.

The judgment and order appealed from must be affirmed, with costs.

Rumsey, J., concurred.

Learned, P. J.

(dissenting):

The doctrine that a creditor who has received securities from a principal debtor must hold them for the benefit of sureties, and that a surrender without their consent discharges them fro tanto, is purely equitable. It is not a legal or arbitrary doctrine, but is one to be enforced solely to do equity between all parties. It rests therefore on knowledge by the creditor of the facts constituting this obligation to others, and is enforced because he has acted in violation of an obligation of which the facts informed him.

In this case the bond in suit was executed to Jenett M. Clark, December 19, 1871; was held by her until April 12, 1872, when it was assigned to Maria B. Clark; was held by Maria B. Clark till January 8, 1875, when it was assigned to Slocum; was held by Slocum till September 18, 1879, when it was assigned to the plaintiff.

I see no evidence that Jenett M. Clark, or Maria B. Clark or the plaintiff knew anything of the power of attorney executed by Stephanie Barbour to Slocum, or that they had any control over it or over Slocum.

So far as appears this power of attorney was an arrangement between Stephanie Barbour and Slocum, by which she endeavored .to set aside a part of her income for the payment of debts in order to guard herself against her own excessive expenditures. It does not appear to have been an instrument to which Jenett M. Clark was a party. Unless -some duty was imposed upon her and accepted by her in respect to this power of attorney she could not be affected by the acts of the parties thereto.

For instance, if á creditor held the note of a debtor with a surety thereon; and if the debtor should afterwards make an assignment to secure that note; and if the aésignee without the consent of the surety should surrender assigned property, this-transaction could not affect the creditor, unless he took some part therein.

So in this case, as far as I can discover, Jenett M. Clark, was not a party to the power of attorney, although if it had been acted upon, it might have inured to her benefit. But she had nothing to do with it, and did not cause or consent to the action of Slocum in respect to it.

On the 23d of May, 1872, Slocum consented to the revocation. Now if we assume that that was such an act as would have released Coster and Mrs. Barklie from any liability, as sureties, on a debt then owing to Slocum, how could it affect a debt then held by Maria B. Clark ? If it could, then it was in the power of Mrs. Barbour by a transaction inter alios (that is, by a transaction between herself and Slocum) to discharge Coster and Mrs.-Barklie-from their liability-on a bond held by Maria B. Clark. I know that the referee finds that the bond in suit was delivered to Slocum, as agent of the obligee. So he might have been for the purpose of receiving the bond. But there is nothing which shows that the obligee had knowledge of the power of attorney, or accepted him as her quasi trustee to act under that power. There is nothing, in short, which imposes on her that obligation in regard to the security created by the power of attorney, on the breach of which obligation the defendants rely. The wrong doing alleged was committed by Slocum.

But it is said this equitable right became a counter-claim when on January 8, 1875, Slocum became the owner of the bond, because it arises out of the contract or transaction set forth in the complaint. This was the view of the learned referee. But what has been said above shows, I think, that this cause of action does not arise out of the contract or transaction set forth in the complaint. (Edgerton v. Page, 20 N. Y., 281.) If it arose out of that transaction it would seem to follow that it would be a defense as against Jenett M. Clark, the original party to the transaction set forth in the complaint. And that I have shown could not be. Nor can the defense be allowed under section 501, subdivision 2, because it is not a cause of action on contract. The case cited by defendant of Glen and H. Man. Co. v. Hall (61 N. Y., 226), was an action to restrain the violation of plaintiff’s trade-mark. The counter-claim allowed, was held to be connected with the subject of the action set forth in the complaint. The case therefore is no authority upon subdivision 2. If, as said above, Slocum had been the original creditor and had .held the securities for his benefit; then it might be said that the alleged cause of action set up by defendants arose out of the transaction set forth in the complaint.

The defendants’ claim is, that Slocum held the rights given by the power of attorney as a quasi trustee for their benefit. We cannot say that a breach of such quasi trust is a breach of contract.

It seems to me therefore that the defense is not a counter-claim allowable in this action.

Judgment affirmed, with costs.


source: Caselaw Access Project

author: Hums ex', J.:

license: Public Domain

text:
    GEORGE H. POWER, Appellant, v. THE VILLAGE OF ATHENS and Others, Respondents.

      Oily of Hudson — right to establish a ferry — iican authorize a ferry one way only.

    Under the various acts of the legislature incorporating and conferring rights and privileges upon the city of Hudson and the village of Athens, that city has the exclusive right to establish, license and maintain ferries from such city to the western shore of the river, but has no right to establish, license or maintain a ferry from Athens to the eastern shore, such right belonging exclusively to the village of Athens.

      Appeal from a judgment by the plaintiff, entered on the réport of a referee.

      Newkirk c& Chase, for the appellant.

      tSamuel Hand, for the respondents.
   Hums ex', J.:

In 1879 the.plaintiff took a lease from the city of Hudson, of the ferry between said city and the village of Athens, situated on the opposite side of the Hudson river. The plaintiff insists that the city of Hudson at the time of making the lease to him, had the exclusive right to establish, license and regulate ferries between said city and the opposite side of the river. In the same year, 1879, the village of Athens and the individual defendants, who-were then trustees of the village, hired a boat and commenced to run her from Athens to Hudson and back as a ferry boat, carrying passengers and teams for hire. Plaintiff claiming the exclusive right of ferriage under h-is lease, brought this suit to restrain the defendants from running their boat as a ferry boat.

The city of Hudson is on the east shore of the river, and the village of Athens on the west shore. The referee to whom the case was referred to hear and determine, found that the city of Hudson had the exclusive right to establish, license and maintain ferries from the said city to the western shore of the river; and that it had no right to establish or license or maintain a ferry from Athens to the eastern shore, but that right belonged exclusively to the village of Athens, and he therefore ordered judgment restraining the village of Athens from running a ferry to transport passengers or property from any point on the. eastern shore of Hudson river within the territorial limits of the city of Hudson to the western shore, and also restraining the plaintiff from running a ferry for like purpose from any point on the western shore within the limits of the village of Athens to the eastern shore.'

Prom the judgment entered on the report the plaintiff alone appealed.

It will be seen that the vital question in the case, and the only question to be decided upon consideration of the merits, is whether the city of Hudson had, at the time of making the lease to plaintiff, an exclusive right to keep and maintain or license a ferry across the Hudson river to the village of Athens, to transport persons and property both ways.

The right to establish and maintain a public ferry is a franchise which can be exercised only by authority of the sovereign power — in this country by the authority of the State in which it is to be exercised. (Conway v. Taylor's Exr., 1 Black, 603; Chenango Bridge Co. v. Paige, 83 N. Y., 178, 186.) A grant of a ferry franchise, like all other grants by the State, is to be strictly construed ; that is, the intention of the grantor is to be carried out, but nothing is to pass by implication, except it is necessary to carry into effect the obvious intent of the grant. (Rice v. Railroad Co., 1 Black, 358, 380, and cases cited.)

The city of Hudson was incorporated by chapter 83, Laws of 1785 (1 Greenl. Laws, 189, et seq). By section 14 of the act, power was granted to the.common council to “settle, appoint, establish, order, direct and superintend ” ferries “ from the said city to the opposite ■or western shore of the Hudson’s river, for the carrying and transporting people, horses, cattle, goods and chattels across the said river,” provided nothing in that act should “ be construed to debar or prevent Ooenraedt A. Flaak of, or from conveying or carrying across the said river, to and from either side of the said river with .a ferry boat, any person or persons, horses, cattle, goods or chattels.”

In-1801, the legislature passed an act relative to the city of Hudson, giving to the common council power to establish, license and regulate ferries “ from said city to the opposite or western shore,” as in the Law of 1785, providing, however, that nothing in'the act should be ■construed to deprive any person whatsoever of any right of ferriage which he now. hath, or hereafter may obtain across the said river. In several subsequent acts of the legislature in regard to the city of Hudson, the power to establish and license ferries was continued in the common council of the city in substantially the same words as are above quoted, the form of expression being in each case, “ from the said city to the western shore of the river.” The word “ exclusive ” in regard to this grant of ferriage is first found in the Laws of 1829 (chap. 101.) The section in which it is granted reads in these words:

“ § 19. The said common council shall have exclusive power, from time to time to establish, license and regulate such and so many ferries from the said city to the opposite western shore of the river, and in such manner as to them shall appear most conducive to the public good, but nothing herein contained shall be so construed to-deprive any person of * * * any right of ferriage which any person now hath or hereafter may obtain across said river.”

The last act in regard to the ferry privileges of the city (chap. 379, Laws of 1876) granted substantially the same rights as the Law of 1829 above quoted. These are the statutes under which the plaintiffs’ rights are claimed. Two -things are especially to be noticed: First, that the grant in each statute is to establish a ferry “ from the said city to the western shore,” and second, that since 1829 the grant has been “ exclusive.”

The first grant of any ferry from the village of Athens appears in an act of the legislature passed in 1804, entitled “ an act granting to Timothy Bunker the exclusive privilege to ferry on the west side of the Hudson’s river, at the village of Athens, in the county of Greene, for the term of five years.”

This act grants to Bunker the right to cut a channel through the flat in the river between Hudson and Athens, and “ to set up, keep and maintain a ferry across the Hudson’s river, from the west side of the said river at Athens, at the termination of Ferry street, to any public landing or ferry stairs on the east side of said river at the city of Hudson.” The act also prohibits any other person from maintaining a ferry on the west side of the river to transport persons and property across.

In 1805 the village of Athens, which was that year incorporated, seems to have become the owner of Bunker’s franchise. Early the following year, and, as it seems, by the report of the referee, as the results of an understanding between the two municipalities, regulations were adopted by each, by which each one assumed to regulate the ferry from itself to the opposite shore. In these regulations each recognized the right of the other to control the ferry from its own side of the river, and each set of regulations contained a rule that its own ferryman might (in case of the absence of the ferryman of the other, and not otherwise) receive passengers and freight upon- the opposite side of the river, and transport them to his own side, but that he should on demand pay the money for such ferriage to the other ferryman. Under these regulations each ran its own ferry or leased it until 1815. -From time to time, since 1815, the legislature have granted to the city and village jointly the right to improve the ferriage, and to lease the privileges of ferriage to any person. From 1815 to the end of 1838 the ferry was run on joint account by the two, each paying one-half the expenses. In February, 1839, the village of Athens leased to the city for twenty years “ the ferry privileges between the city of Hudson and the village of.Athens, which belong to the said village,” at a rent of $725. By separate renewals for terms of ten years each, .this lease continued until February 28, 1879, when the city of. Hudson no longer renewed it, but leased to the plaintiff. In 1857, and while the city of Hudson still had the exclusive right as to ferries granted by the act of 1829 and subsequent acts, the legislature granted to the village of Athens “ the exclusive power over the ferries from the said village to the eastern shore of the river.” In 1870 Athens organized as a village under the general act, and in 1878 the legislature passed an act preserving to it any ferry franchises which it held before its organization under the general act. We may say that this last act was entirely superfluous, because the general act for the incorporation of villages under which Athens was reorganized, expressly saves to the reorganized village all property and rights of property which its predecessor had. (Laws of 1870, chap. 291, § 30.) A ferry franchise being property, the village did not lose it by such reorganization, (Conway v. Taylor's Executor, 1 Black, 603). The foregoing is a summary of so much as we deem material of the history of this ferry. It appears that since 1785 the city of Hudson has had a right of ferriage from the east to the west shores of the river, which since 1829 was by law made exclusive. It also appears that while the city had this right, and in 1804, the legislature granted to Bunker an exclusive right to ferry from Athens across. If the previous grant to Hudson of a ferry, gave the right to ferry both ways, then the grant to Bunker gave to him the same right exclusively for five years, and destroyed the grant to the city. But neither party so interpreted the laws, for we find that as soon as Athens was incorporated, the two corporations began to exercise the precise right which each then owned, according to the terms of the grant.' From that time we find also that the legislature by its statutes recognized that Athens had some ferry privileges which she might lease, and that Athens did in fact, during all the years to 1857, exercise or lease the very rights which were granted to Bunker for a limited time and afterwards claimed by her tinder assignment, and that the same rights were granted when her charter was amended in 1851. From these facts we think that a presumption arises that there was a grant of this right to Athens before 1857. (Trotter v. Harris, 2 Young & Jer., 285.) We find also that these two rights had for many years been peaceably enjoyed, had not been regarded as inconsistent, and had received the precise construction contended for by the defendants.

This practical construction of these grants by the interested parties, although it has not the force of a judicial decision, is of great weight and should not lightly be disregarded. (Easton v. Pickersgill, 55 N. Y., 310.) We find also that the legislature in granting ferry franchises used two forms of expression, one by which a ferry is granted from one side to the other only, the other by which the grant is to and from either side ” or “ from one side to the other and back.” An example of each is in section 11 of the Laws of 1785 incorporating the city of Hudson. A list of these acts will be found in 3 Revised Statutes (1st ed.), 639, and by reference to the acts the different mode of expression may be noticed. In the Laws of 1797 authorizing courts of common pleas to grant ferry licenses the legislature found it necessary to say, that in a certain case the license should be sufficient to enable the person receiving it to ferry “ to and from either side of said water.” (1 Webster’s Laws, 161.) That clearly would not have been necessary if the license implied that right.'

But the learned counsel for the appellant insists that the term “ ferry ” involves the idea of carrying both ways. If we abandon the strong evidence of practical construction and legislative action and go to the reported cases we shall find that they do not sustain his claim. We are referred to a number of cases in which the principle is recognized that a right of ferriage may exist from one side to another only of a stream, and indeed from one side only to the middle. (Giles v. Groves, 12 Ad. & Ell. [N. S.], 721; Pim v. Curell, 6 M. & W., 234; People v. Babcock, 11 Wend., 587; Conway v. Taylor’s Exr., 1 Black, 603, 605, 630; Columbia D. B. Co. v. Geisse, 38 N. J. Law, 39; B. and H. Ferry Co. v. Davis, 30 Am., 390.) We are clear upon principle and authority that a ferry franchise can be granted giving the right to transport persons and property from one side of a stream to the other only.

The grant to the city of Hudson gave but this right. The referee was correct in so holding. This conclusion renders it unnecessary to examine the other questions discussed in the briefs. The case was properly disposed of by the referee having regard to' the rights of both parties.

As the defendants have not appealed we cannot modify the judgment in their behalf in the matter of costs.

The judgment must be affirmed, with costs.

Learned, P. L, and Osborn, <L, concurred.

Judgment affirmed, with costs.


author: Rumsey, J.:

text:
    CHATFIELD LEONARD, as Receiver, etc., Appellant, v. CALCINA B. CLINTON and Others, Respondents.

      Policy of insurance— when the wife’s interest therein is not subject to the claims of her creditors — when the husband's creditors cannot set aside an assignment of a policy made by him — 1858, chap. 814.
    The amount received by a wife upon a policy of insurance, issued upon the life of her husband for the benefit of herself and children, is not subject to the claims of her creditors.
    Where policies taken out by a husband upon his own life, payable to his representatives, are assigned by him to his wife, who thereafter, with the intent to defraud her creditors, assigns the policies to her children, the creditors of the wife are entitled to recover from her children the surrender value of the policies at the time of their assignment to them.
    The right of a creditor, after the recovery of a judgment and the return unsatisfied of an execution issued thereon, to bring an action to set aside a fraudulent conveyance of his property, made by the debtor, is not affected by the fact that the debtor has made a general assignment, and that under chapter 814 of 1858, the assignee is entitled to bring an action for the same purpose, provided no such action has in fact been brought by the assignee.
    Appeal fróm a judgment in favor of the defendants, entered on the decision of the court after a trial at a Special Term.

      This action was in the nature of a creditor’s bill, and was brought to set aside the assignment of three life insurance policies made by the defendant Calcina 13. Clinton to the defendants Ella, Anna, Eanny and Abbie Clinton, as fraudulent and void as to the creditors of the defendant Calcina B. Clinton ; and to recover of the defendants Ella, Anna, Fanny and Abbie, an amount sufficient to pay the judgments represented by the plaintiff, with interest, costs in proceedings supplementary to execution and costs of this action.
    On the 11th day of February, 1860, the New York Life Insurance Company issued a policy of insurance for the sum of $6,000 upon the life of William M. Clinton for the sole use of his wife, the defendant Calcina B. Clinton, and their children.
    On the 20th day of July, 1867, the said William M. Clinton duly assigned to the defendant Calcina two policies of insurance upon his life, one for $5,000 issued July 21, 1865, and the other for $2,500 issued February 27, 1867.
    From the year 1871 down to the 1st day of June, 1878, the defendant Calcina B. Clinton was engaged in and doing business on her own account as a manufacturer of cotton cloth, separate from her husband, during which time the indebtedness accrued for which the judgments represented by the plaintiff herein were recovered. During this time she paid the annual premiums upon said $5,000 and $2,500 policies out of her separate estate, and also the annual premiums upon the $6,000 policy.
    On the 1st day of June, 1878, the defendant Calcina B. Clinton was insolvent and unable to pay her debts, and on that day she executed an assignment of the $5,000 and $2,500 policies to the defendants Ella, Anna, Fanny and Abbie Clinton, and also of her interest in the $6,000 policy for the consideration of five dollars. The $5,000 and $2,500 policies were then worth and could have been surrendered to the companies issuing the same for at’least the sum of $732.44, and the defendant Calcina B. Clinton had knowledge that they could be so surrendered. On the 2d day of July, 1878, the defendant Calcina B. Clinton executed a general assignment for the benefit of creditors to the defendant William Lake. The defendant Lake is the general guardian of the defendants Fanny and Abbie Clinton, who are minors.
    In the month of February, 1880, William M. Clinton died, and subsequently thereto and before the commencement of this action, the amount due on the $5,000 and $2,500 policies, to wit, the sum of $7,500, and five-ninths of the $6,000 policy, to wit, the sum of $3,333.31, was paid by the companies issuing the same to the defendants Ella, Anna, Fanny and Abbie Clinton, four-ninths of the $6,000 policy having been paid to the children of said William M. Clinton by a former wife.
    The trial judge found as conclusions of law that the assignment by Calcina B. Clinton to the defendants Ella, Anna, Fanny and Abbie Clinton of her interest in the $6,000 policy was not fraudulent or void. That the assignment by her to the same defendants of the $5,000 and $2,500 policies were fraudulent and void as to her creditors to the extent of the surrender value of said policies at the time of the assignment. ' But that the right of action to set the assignments aside, and to recover out of the money paid to the defendants Ella, Anna, Fanny and Abbie Clinton, the surrender value of said policies, was vested in the defendant Lake as the general assignee of the defendant Calcina B. Clinton, and dismissed the complaint, with costs.

      John Lewis, for the appellant.

      James A. Lynes, for the respondents.
   Rumsey, J.:

. The facts in this action are stated as shortly as may be in the decision of the court.

The policies of life insurance in question are of two kinds. The policy for $6,000 was issued on the life of William M. Clinton, the husband, payable to his wife and their children at his death. It is within the provisions of the statute authorizing the insurance of the life of the husband for the benefit of the wife. (Laws of 1870, chap. 277, amending cliap. 80, Laws of 1840, Bloomingdale v. Lisberger, 24 Hun, 356). Before 1873 the wife could not assign these policies. (Eadie v. Slimmon, 26 N. Y., 9; Barry v. Equitable Life Assurance Society, 59 id., 587.) Chapter 821, Laws of 1873, permitted a married woman, having no children, to assign these policies by deed. Mrs. Clinton had children, and her attempted assignment was not a deed. Tjiere was therefore no assignment, and her children took no title to her share of the policy. (Bloomingdale v. Lisberger, 24 Hun, 356.) The payment by the insurance company to the children, of Mrs. Clinton’s share, did not discharge it, and they took nothing for which they can be compelled to account to her creditors.

We do not think that policies taken out under this act are subject to the claims of the creditors of the wife. They are intended as a provision for the support of the widow and children of the husband after his death. When the statute authorizing such policies to be issued was first passed, a wife would not under ordinary circumstances have creditors. The law has from time to time since then extended her rights and increased her liabilities, but it has not changed the nature of her contingent interest in these policies, nor has it decreased the necessity for keeping them for her support. The decisions seem to regard them as free from the claims of creditors. (Barry v. Equitable Life Assurance Society, 59 N. Y., 593, 594; Smillie, Trustee, v. Quinn, 25 Hun, 332.) As to the policy for $6,000 we are clear the judgment is right, and the creditors of the wife can reach no part of it.

The other two policies were when issued payable to the personal representatives of William M. Clinton. At that time they were not within the statute above cited. The defendants seek, however, to bring them within the equity of the statute because of the fact that after they were issued William M. Clinton assigned them to his wife Calcina B. Clinton. When the act of 1840 was passed, there was no way other than under its provisions by which a husband’s life could be insured for a gross sum for the benefit of his wife. (Denio, Ch. J., Eadie v. Slimmon, 26 N. Y., 9, 17.) The policy made originally payable to his personal representatives, could not be assigned to her for the reason stated by Judge Denio in the foregoing citation, and for the further reason that an assignment from the husband to the wife was void at law. This policy could not then, before the passage of the married woman acts, have been brought within the statute of 1840, by this assignment.

The right to take this assignment came to her by the act of 1860 (ch. 90), and whatever property that act permits her to take, she takes as her sole and separate property, and she may use, collect and invest it in her own name. These two policies were her husband’s. The assignment to her, which could become effective only by the force of the married woman acts, transferred them to her to hold as she held all other property and not otherwise. We think, therefore, that her interest in these two policies was subject to the claims of her creditors to some amount. That 'amount could not be greater than the surrender value because neither Mrs. Clinton nor her assignee was called upon to keep up the premiums for the benefit of creditors.

The learned justice at Special Term held that the transfer of these two policies was fraudulent as to the plaintiff, but refused to permit him to recover because the assignee for the benefit of creditors has the exclusive right to maintain this action. The correctness of this conclusion is the only question to be examined.

Before the year 1858 a transfer made by a debtor in fraud of creditors could be attacked only by a creditor who had either by judgment and execution returned, or by attachment acquired, a lien upon the property so transferred. The assignee for the benefit of creditors stood in the shoes of his assignor, and was bound by such a transfer and could not question or attack it. (Brownell v. Curtis, 10 Paige, 211.)

In 1858 chapter 314 of the laws of that year provided that an assignee for the benefit of creditors might for their benefit disaffirm, treat as void and resist all acts done or transfers or agreements made in fraud of the rights of creditors.

This act gave a new remedy in favor of creditors at large which the assignee might enforce without acquiring a specific lien, and in spite of his situation as successor of the fraudulent assignor. (Southard v. Benner, 72 N. Y., 424.) But the act is strictly an enabling statute; it confers a right but takes away none; it provides for certain creditors a new remedy, but it contains no negative words. In such a case the remedy which it provides is cumulative and not exclusive. (Crittenden v. Wilson, 5 Cow., 165.) The statute does not vest in the several trustees named in it the title to the property transferred in fraud of creditors, as the bankrupt law does, but it simply dispenses as to them with an act which the common law required as a, prerequisite to maintaining the action. As the statute permits the assignee to bring this action for the benefit of creditors, it may be that where an assignment had been made without preferences the court, having in view an equal distribution of the property, would restrain a single creditor from pursuing his action to set aside a fraudulent transfer where the assignee had sued for the same purpose. But until such a suit was brought there is nothing in the statute to prevent any creditor who has obtained his-lien from attacking a fraudulent conveyance as he might before the passage of the act.

The case of Glenny v. Langdon (98 U. S., 20), cited to sustain the exclusive right .of the assignee, is not in point. That case arose under the bankrupt law which transferred to the assignee in bankruptcy the entire title to the property conveyed by the bankrupt in fraud of creditors, so that such an action could not be brought by a creditor though the assignee refused to bring it. (Trimble v. Woodhead, 102 U. S., 647; Moyer v. Dewey, 103 id., 301.) The dicta in Dewey v. Moyer (72 N. Y., 70) to the effect that a creditor can in any case maintain an action to set aside a fraudulent transfer, where it appears that bankruptcy proceedings have been had and an assignee appointed who has failed to sue, are overruled by the Supreme Court of the United States in the cases cited above, and the law is established that the assignee by express operation of law has the exclusive right to bring such an action. So in Bate v. Graham (11 N. Y., 237) the dictum, of Judge Denio that ordinarily a creditor cannot maintain an action against a fraudulent vendee of a deceased debtor, or against him and the administrator to set aside the fraudulent transfer and have the property held under it administered as assets, is based on the provision of the statute which takes away the liability of the fraudulent vendee, to be sued as executor of his own wrong and makes him responsible only to the personal representatives. (2 R. S., 449, § 17.) But neither class of cases apply to this action for the statute in question takes away no right of action or right of property.

It 'follows that the conclusion of the learned justice that the assignee for the benefit of creditors had the exclusive right to maintain this action was erroneous, and the judgment must be reversed and a new trial ordered, costs to abide the event.

Learned, P. J., and Osborn, J., concurred. •

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


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    In the Matter of the Application of the ATTORNEY-GENERAL v. THE NORTH AMERICA LIFE INSURANCE COMPANY.

      Receiver of an insolvent life insurance company — commissions — upon what funds they are allowed. — duty of, as to investment — when he will be charged with interest — the court may review the action of the Superintendent of the Insurance Department in fating his commissions.

    At the time of the appointment of the receiver of a life insurance company, there were outstanding premium notes and loans upon the policies amounting to $398,028.80. They were considered as offsets to the amounts of the face values of the policies, and were carried on the hooks of the company, and afterwards on those of the receiver, only as charges or liens on the policies. None of them were collected, but the amount due upon each policy was ascertained by ■ deducting the loans or premium notes standing against it, and the difference was treated as the debt due from the company on which dividends were computed by the receiver.

      Held, that the receiver was not entitled to commissions upon the amount of such notes and loans.
    The receiver advanced moneys to be used in paying off taxes upon lands covered by mortgages belonging to a special fund in the hands of the insurance superintendent, which mortgages were then in process of foreclosure. The moneys were subsequently repaid to him upon the sale of the property.

      Held, that he was not entitled to receive commissions on the amount so repaid ■ to him.
    The superintendent of the insurance department has power to allow commissions to the receiver upon the special fund held by him for the company, and paid over to the receiver, as well as upon the general assets. And such special fund is also chargeable with its proportionate part of the expense of closing up the affairs of the company.
    The court has power to review the action of the superintendent of the insur anee department in fixing the commissions to be allowed to a receiver.
    The commissions of the receiver should not be fixed by the superintendent until he knows the labor to be performed by the receiver, the time necessarily to be occupied by him, and the responsibility to be imposed upon him.
    All parties interested in the fund are entitled to notice of the application to fix the commissions of the receiver.
    Although it is, under some circumstances, the duty of a receiver to see that the funds in his hands do not remain unproductive, yet he should make no loans or investments thereof himself, without having first applied to the court and obtained instructions from it.
    Where a receiver, without applying for, or obtaining instructions from the court, placed the funds in his hands with private bankers,- without taking any security therefor, and loaned them upon stock collaterals, and was unable to tell to whom the bankers loaned them, or what securities were received, or the amount of interest received, the court charged him with interest at the rate of four per cent upon his monthly balances.
    Appeal by the receiver and by various policyholders from an order of the Special Term passing the accounts of the receiver.
    The North America Life Insurance Company was put into the hands of a receiver under the act of 1869, chapter 902, upon the application of the Attorney-General, March 8,1877. The receiver, Henry Ii. Pierson, Esq., filed preliminary accounts in April, 1881, which accounts purported to include all transactions of receipts and disbursements down to and including the 31st day of December, 1880. This account claims $1,368,129.16 as the total receipts, and five per cent thereof, to wit, $68,106.11, as the commission due to the receiver to December 31, 1880.
    In the course of the examination the receiver admitted that the sum of $3,997.12 was improperly added to the receipts and disbursements, and also the further sum of $2,595.11, being premiums received after the company was enjoined from doing business, and which did not fall due until after the receiver was appointed.
    The Special Term still further reduced this sum by the following amounts: $398,028.30, being the amounts of notes and loans on policies and offsets against the face of the policies upon their maturity; $30,176.51, being deductions from death claims or liabilities reduced from their face values by this amount; $22,513.09, being the amount advanced by the receiver for taxes, on property sold under the foreclosure of mortgages belonging to the special fund in the hands of the superintendent of insurance, and which was repaid by the superintendent to -the receiver.
    The receiver appealed from the order of the Special Term deducting these amounts, and also from that part of the order which set aside the letter of the superintendent of insurance of April 3, 1878, fixing the receiver’s compensation at five per cent of the assets which might come into his hands, and which also requires the superintendent to fix the per centage anew. The receiver had drawn $33,100, on account of his commissions, out of the fund, and had not charged himself with any interest thereon. Among the funds which came into the hands of the receiver were some $750,000, paid him by the superintendent of the insurance department, being the proceeds of certain securities placed in the superintendent’s hands under chapter 902 of 1869, as collateral security for the payment by the company of its obligations upon a certain class of policies known as registered policies.
    It was claimed by some of the appellants that the sum found by the court below, to wit, $910,749.10, as being that upon which the receiver’s compensation should be computed, should be further diminished by the amount of the said registered fund; and also that the court erred in directing that the said registered fund should be charged with a pro rata amount of the expenses of' winding up the company. The registered fund does not cover the admitted claims of the registered policies to a greater extent than about fifty-five per cent.
    jffi. IF. Peolcham, for the receiver.
    IF Barnes, IF D. Whiting, R. J. Moses, Jr., I. Mo Adam, for various policyholders.
   Rumsey, J.:

On the 8th day of March, 1877, the North America Life Insurance Company was enjoined from doing business, and Henry R. Pierson was appointed receiver upon the application of the Attorney-General, pursuant to chapter 902, Laws of 1869. In April, 1881, the receiver presented his accounts to the Special Term for examination and approval, and a hearing was had upon the exceptions filed. After considerable evidence had been taken, the court, on the 8th day of September, 1881, made the order which is the subject of this appeal.

The first question argued is whether the receiver should be allowed commissions on the sum of $398,028.30, the amount of notes and loans outstanding on policies at the time of his appointment. It appears that these notes and loans had been made and were outstanding upon the policies in force on the 8th day of March, 1877 ; that they were considered as offsets to the amount of the face value of the policies; and that the notes and loans were carried on the books of the company, and afterward of the receiver, only as charges or liens on the policies, and that none of them were collected, bnt the amount due upon each policy was ascertained by deducting the loans or premium notes standing against it, and the difference was the debt due from the company, on which dividends were computed by the receiver. "We think that these notes and loans were not assets on which commissions should be allowed. They constituted neither a receipt nor a disbursement. The receiver collected nothing by reason of their existence; nor did they"enlarge either his labor or his liability. As was stated in the opinion of the learned judge at Special Term, they are offsets; they are not assets.” (People v. Security Company, 78 N. Y., 115, 127.) The case of Van Buren v. Chenango Insurance Co. (12 Barb., 671) differs from this one. In that case the notes were the capital stock of the company, and were the only reliance for the payment of its debts, and the receiver was allowed his commissions on them for' that-reason. But that case recognizes the principle that the receiver should have commissions only on his receipts, for the court refused to allow commissions on notes which were not collectible.

The same rule applies to the item of $30,176.51. The receiver ascertained the value of each policy on the 8th day of March, 1877, and if the holder of it died after that date, the premiums and interest he would have been called on to pay to keep it alive were deducted. The total amount of these deductions was the sum of $30,176.51. Nothing was ever received on this item, and it seems to have been simply an entry on the books for the convenience of the receiver or his book-keeper, to enable him to estimate the amount due on such policies.

The item of $22,513.09 was also properly deducted from the amount on which commissions are to be estimated. It seems that the receiver had in his hands a large sum which he had received from the superintendent of insurance. This sum is charged in his receipts as assets. At the same time the superintendent was foreclosing mortgages which constituted a part of this special fund, and upon the property covered by these mortgages there were taxes bearing large interest, which the receiver advanced the money to pay. This advance, amounting to $22,513.09, was repaid to him after the sale of the property, which it seems brought at the sale an enhanced price equal to the taxes paid.

This repayment was not an asset, it was simply replacing in the hands of the receiver a portion of the assets which had for temporary purposes been taken out of the fund. The receiver had the benefit of it as a basis on which to estimate his commissions when he received it in the first place from the superintendent, and if he is allowed to use.it again he gets commissions on it twice and upon so much more than the actual assets received.

We think that commissions are properly chargeable on the amount of the special fund which was paid over by the superintendent to the receiver. The statute directs that the commissions shall be estimated on the amount of the assets of the company which shall come into his possession.

We have no doubt that this special fund is a part of the assets of the company. It is applicable to the payment of its debts, and by the express terms of the statute it is to be paid to the receiver for that purpose. (Atty.-Genl. v. North Am. L. Ins. Co., 80 N. Y., 125.) It makes no difference that certain debts are to be first paid out of it. They are equally with uon-registered policies. debts of the company. It is true that these securities ai-e to be converted into money by the superintendent and not by the receiver. But aside from this, all the responsibility for this fund while in his hands and all the .abor of its distribution are thrown upon the receiver; and by reason of the existence of this fund the care of the receiver is increased, the expenses are enhanced and, as may be seen from this case, the litigation and delay and trouble is largely caused.

It is not right or proper that all this should be borne by the general fund. It is in the power of the superintendent to fix the commissions with refei'ence to the existence of the two funds and to take into consideration the additional care imposed upon the receiver by reason of this special fund, and to compensate him with reference to this care and to the fact that both funds are chargeable with the burden, and, also, that the expense and responsibility of converting this fund into money 'was borne by the superintendent.

We do not think that the argument is sound that the statute by implication forbids the payment of any of the winding up expenses out of this special fund. The statute says such expenses shall be a charge on the funds of the company. (Sec. 13.) The special deposit is part of the funds. It shares largely in the benefit derived from the labor of the receiver and his clerks and actuaries and we can see no good reason why it should not contribute to- the expense.

"We have more difficulty with the interest accounts. The strict duty of the receiver holding these funds for distribution, and not for investment, was to keep them separate from all other moneys so that they could at all times be traced and identified. (Utica Ins. Co. v. Lynch, 11 Paige, 520.) He ought not in any way to use the funds unless by direction of the court. It is true that under some circumstances it may he his duty to see that the fund shall not remain unproductive, hut when it becomes necessary to invest it he should apply to the court for instructions, and should make no loans or investments without having first obtained such instructions. (Story’s Eq., § 833 a ; 1 Barb. Ch. Pr. [2d ed.], 674, et seq.; Fletcher v. Dodd, 1 Ves. Jr. 85.) If he invests the money he should we think, in the absence of other directions from the court, invesf it in government or real estate securities as is the duty of other trustees for investment (King v. Talbot, 40 N. Y., 76), or in the manner prescribed for insurance companies by statute. (Laws of 1868, chap. 318.) And he should keep clear, accurate and precise accounts, otherwise all presumptions are against him and all obscurities are resolved advei'sely to him. (Perry on Trusts, § 821; Bonner v. Maybin, 3 Wood., 724.) These rules are adopted for the protection of the fund and cannot be too strictly enforced.

An examination of the evidence shows that the receiver has not complied with them. He put this fund in the hands of’private bankers, without taking from them any security whatever. He loaned it without direction of the court upon stock collaterals of which he was unable at the time of the examination to give any account. Indeed he could not tell to whom the loans were made; nor the amount of them, nor the form of the notes, nor the security taken for each loan, nor in fact that security was always taken. The truth seems to be that all the receiver had to show for this money in the hands óf his brokers, was a receipt that they had so much money to loan for him. So far as appears, he .kept no account of this fund on any of his books, unless perhaps he had some entries in a pocket account book which he carried with him, but which he did not produce. There is a painful lack of knowledge on the part of the receiver as to the condition of this fund while it was in the hands of the brokers, and’ no effort apparently-made by him to inform the court of the exact earnings made by it. Indeed the accounts of Chase & Atkins, the brokers, indicate that the loan was to them, and they give no account of separate loans to ■other persons, nor do they show that any such loans were made. Nor do they account for all the money they had. It appears that •on the 28th day of February, 1880, $400,000 was received from the ¡superintendent, and that eight or ten days afterward it was sent to the brokers to be loaned on collaterals. The receiver says he loaned that himself, but he is unable to give the particulars of a •solitary loan, or even the name of one person to whom such a loan was made, and that sum does not appear in the account furnished by Chase & Atkins. This all wrong. The receiver had not the powers given by section 12 of the act, for it was not his duty to manage the affairs of the company, but to collect the assets and distribute them as required by section 8.

Even if he had the power' to invest, it does not appear that the investments he made were such as the statute requires. (7 Edm. Stat., 807.) It is true that it does not appear that the receiver mingled this money with his own, but there does appear upon his own evidence a carelessness about this large trust fund, and an ignorance •of its situation, which ought not to pass without rebuke. The tendency of modern legislation to devolve upon the courts, through receivers, the care of great interests and the custody of vast sums, demands that such trustee be required at all times to comply with the strict rules which experience has shown will alone prevent loss. It is true that in this case there does not appear to have been any fraud or dishonesty on the part of the receiver, nor was the fund lost or diminished in his hands, but that fact does not excuse any breach of trust. (Utica Ins. Co. v. Lynch, supra.)

As it appears that the receiver actually caused the money to be put to use, and he cannot show what interest he received on it, we might charge him with interest at the rate of six per cent, which is the legal rate. (1 Perry on Trusts, § 468.) But in view of delays likely to occur in making such investments as the court would order, ¡and the probability that they would not earn so much as legal interest, we are not inclined to charge him with it. We think the ■case will be properly disposed of on this branch of it, by surcharging the account of the receiver with interest at the rate of four per cent on his monthly balances, as shown by Exhibit 2, since April* 1878, which was the date when he received the first large installment of the special fund, the payment of which he compelled from the superintendent. He is, of course, to have credit on the interest account for the amount actually paid in by him as interest.

As to the commissions of the receiver the order is affirmed. The statute gives to the superintendent the power to fix the commissions to be allowed. Ve do not think this discretion is unrestrained. The whole proceeding is in court; the receiver is an officer of the court, and the court has general supervision of the distribution of the fund. (People v. Security Life, 79 N. Y., 267.) If the commissions of the receiver had been fixed by the court, its action would be the subject of appeal. It is a judicial act in a proceeding pending in the court, and we do not see any reason why it may not be reviewed like the act of commissioners to appraise lands, by a motion to vacate or set it aside, or by a motion to review it on the merits like the case of a taxation of costs by the clerk. (Matter of Canal and Walker Sts., 12 N. Y., 406; Matter of N. Y. C. and H. R. R. R. Co., 64 N. Y., 60.) It certainly is not the policy of the law to put such a power in a judicial proceeding in the hands of anyone uncontrolled and unrestrained, and the fact that the matter is pending in court implies that the Special Ter In has all its powers in dealing with it* among which is the power to control all the proceedings had before it, and to set them aside on sufficient cause shown. (Matter of R. R. Co., 64 N. Y., 60-62; Matter of Application of Mayor, 49 N. Y., 150.)

We think the action of the superintendent was properly set aside. It was premature. The compensation should not have been fixed until the superintendent knew with some certainty the labor to be performed, the time necessary to be occupied, and the responsibility to be imposed upon the receiver. (Gardiner v. Tyler, 4 Abb. Pr. [N. S.], 463; Grant v. Bryant, 101 Mass., 567-570.) It was ex parte. The proper practice in such cases is to require notice of the application, that all parties interested in the fund may be heard. (Muller v. Pondir, 6 Lans., 474, 482, Learned, J.; Edw. on Peers., 643-660.) It was based upon a misunderstanding of the-facts. The letter of the receiver states the assets at not over $600,000. As claimed by the receiver now they are more than twice that sum; and as allowed they are over $900,000.

The order of the Special Term must be affirmed, except so much as relates to the interest account. As to that portion the order is reversed and the account of the receiver will be surcharged by computing interest at four per cent on the monthly balances in his hands since April 1, 1878, as shown by Exhibit No. 2, crediting him upon said surcharge with the interest now charged in his account.

No costs of this appeal allowed to any party. '

Learned, P. J., and Osborn, J., concurred.

Order of Special Term affirmed, except so much as relates to interest account; as to that portion reversed, and receiver surcharged by computing interest at four per cent on monthly balances in his hands since April 1, 1878, as shown by Exhibit No. 2, crediting him on such surcharge with interest now charged in his account. Order to be settled by Rumsey, J.


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    AGRICULTURAL INSURANCE COMPANY, Respondent, v. HENRY BARNARD, Appellant, Impleaded, etc.

      Committee of lumatic— application by, for leave to mortgage real estate — it must be accompanied by a bond— the lunatic is not entitled to notice of hearing before the referee — a report of the agreement to mortgage must be made —1874, chap. 446, tit. 2, sees. 6-17.
    An application by the committee of a lunatic for leave to mortgage his real estate, made under section 9 of title 2 of chapter 446 of 1874, must be accompanied by
    • the bond required by sections 7 and 8 of the said act. When such bond is not' given and filed at the time of making the application a mortgage given in pursuance of an order of the court subsequently made is void.
    No notice of a hearing before a referee appointed by the court upon such an application need be given to the lunatic.
    A mortgage given by the committee without first reporting to the court the agreement made therefor, as required by section 11 of the said act, is void.
    Where the committee has failed to file the bond or to make the said report the court has no power to allow the bond and report to be made and filed nunc pro tunc, and thereby render valid the void mortgage.

      Appeal from a judgment in favor of the plaintiff, entered on the decision of the court after a trial had at a Special Term.

      E. 0. James, for the appellant.

      A. E. Sawyer, for the respondent.
   Rumsey, J.:

The action was brought to foreclose a mortgage given by Martin Thatcher, the committee of the person and estate of Henry Barnard, a lunatic.

The committee, after his appointment as such, took Barnard to the State Lunatic-Asylum, where he remained until he was dis7 charged therefrom. At the time of his discharge, in the summer of 1877, there was due to the asylum for his maintenance while there $1,425, and on the 1st day of October, J 877, an action had been commenced against the committee to recover it. On the tenth day of October, 1877, the committee presented to this court a petition, asking for leave to mortgage so much of the real estate of the lunatic as might be necessary to pay the debt to the asylum incurred for the maintenance of the lunatic. No bond was given or filed at the time of the presentation of the petition, or at any time before the mortgage was made.

The matter was referred to a referee, who proceeded to inquire into the truth of the allegations. He caused six days’ notice of the hearing to be served by mail, but the notice sent to the lunatic was mailed to a place where he had not lived for a year, as the committee knew. The referee on the day fixed, took the testimony of the committee, no one appearing for the lunatic, and made his report, on which the court ordered “ that to provide for temporary necessity, and to give time for beneficial sales of the lands, the said committee is hereby authorized and allowed to mortgage ” two pieces of land mentioned “ for the sum of $1,500.”

Thatcher accordingly made the mortgage in . suit. His action in making this mortgage was not reported to the court until after the mortgage had become due and this* suit was pending. This action was commenced on the 28th day of November, 1878. On the 18th of March, 1879, a guardian ad litem was appointed for the lunatic, who appeared and answered on the 3d day of April, 1879. In July, 1879, the court at Special Term made an order directing the committee to file a bond in the proceeding to mortgage the real estate, which bond when filed it directed should have the same force and effect as if made on the presentation of the application and filed in the county clerk’s office.

The bond was made, approved and was filed on the 15th day of September, 1879. On the same day, in July, 1879, the committee made his report of the agreement with plaintiff to loan the $1,500, which report was confirmed, and the mortgage ordered to be made; the committee at once reported that he had made a mortgage dated October 19, 1877, conditioned for the payment of the said sum of $1,500 due in one year.

The court at once confirmed this report, and ordered the money to be paid to the lunatic asylum to discharge the debt incurred for the support of the lunatic. All these reports and orders were, by the court, directed to be made and done with the same force and effect as if they had been made at the proper time when the proceedings to make the mortgage were pending. All were made on the 8th day of July, 1879, and were filed and entered September 15, 1879. Notice of the application for these orders was served on the attorney for the lunatic, and his guardian ad litem in this action, who did not appear on the motions. No other notice of said applications was given. An order was made July 9, 1879, reciting the fact that Barnard had been restored to his right mind and superseding the inquisition.

The court at Special Term held the mortgage good and ordered judgment for the plaintiff. Barnard appeals. The case contains only the judgment roll, but we have been furnished with certified copies of the petition and subsequent proceedings had to mortgage this property. We are at liberty to examine them on the appeal, at least for the purpose of sustaining the judgment. (People v. Snyder, 41 N. Y., 411; Howard v. Moot, 64 N. Y., 271; Dunford v. Weaver, 84 N. Y., 445.)

The first question presented by this appeal is, under which of the two proceedings authorized by the statute to sell or encumber the real estate of a lunatic this mortgage was given ? Both of them are described in title 2, chapter 446, Laws of 1874. (Tit. 2, §§ 6-13, , and §§ 17-20.) The one first provided for authorizes the disposition of the real estate when it appears that it is necessary and proper for the support or maintenance of the lunatic, or for his education, or that his interests will be substantially promoted by it; or when it has been contracted to be sold and a conveyance cannot be made, or for any other peculiar reason or circumstances. (Sec. 9.) The other proceeding is simply to pay debts. It has in view the discharge of all the debts of the lunatic; and expressly -requires that the money raised by it shall be applied on all the debts in an equal proportion. (Secs. 19-21.)

The findings of the court do not indicate that these proceedings in question were had under that branch of the statute. The finding is, that the petition asked leave to mortgage real estate to raise $1,500 to pay this debt. A reference to the certified copy of the papers shows that this was the nature of the proceedings, and that it must be governed by the rules laid down in sections 6 to 13 of the- act. Indeed, proceedings to pay this claim of the lunatic asylum could not be taken under the authority given to mortgage or sell to pay the debts of the lunatic. This claim was not a debt of the lunatic. It was contracted for the maintenance of the lunatic by the committee who has no power to contract for the lunatic. (Pearl v. McDowell, 20 Am. Dec., 199.) If he paid it the court might allow it in his accounts, or the court could authorize real estate to be disposed of to pay it under title 2, section 9, but not under sections 17, et seg.

Did the court have jurisdiction to direct that this mortgage should be made? If there was such jurisdiction the subsequent defects are mere irregularities which cannot be used in this action to invalidate the mortgage. (Freeman on Yoid Jud. Sales, § 21.) It is a general rule in this class of cases where special statutory proceedings are relied on to take away title that everything required by the statute to give jurisdiction must be done. (Sharp v. Speir, 4 Hill, 76 ; Ackley v. Dygert, 33 Barb., 176; Stilwell v. Swarthout, 81 N. Y., 109.) Any substantial departure from its requirements makes the proceedings void. (Stilwell v. Swarthout, supra.) The proceedings had, appear by the findings of the court and the certified copies presented to us. We think that the petition contains all that is necessary.

Section 6 does not prescribe just what the petition shall contain, but an examination of tbe petition shows that it sets out substantially the facts necessary to enable the court to find that the state of affairs existed which is required by section 9 to authorize some disposition of real estate. That was a practical compliance with the statute. (Freeman on Yoid Jud. Sales, § 11.) But it was not enough to authorize the court to act. The statute requires that a bond shall be given on the application. It requires the bond as a part of the application to the court, and it authorizes the court to act only when the bond has been filed. Such filing is one of the steps required before the court can proceed. (Secs. I, 8.) It is a part of the application as much as the petition. Until that has been done the statute does not authorize any further step to be taken. The court does not have possession of the proceedings until the bond has been filed. The court can dispense with nothing, but every preliminary step, especially if it be one which has a semblance of benefit .to the owner, must be complied with before jurisdiction is had. (Corwin v. Merritt, 3 Barb., 343; Bloom v. Burdick, 1 Hill, 138; People v. Hulburt, 16 N. Y., 110-115.)

These proceedings being statutory, even the Supreme Court is as . to them a court of special jurisdiction, and it must be shown that the statute was strictly followed to enable it to acquire the right to act. (Chamberlain v. Roch. S. P. V. Co., 7 Hun, 557; Striker v. Kelly, 2 Denio, 323; Castellanos v. Jones, 1 Seld., 164.) It appears by the judgment roll that no bond was filed. "We think this defect was fatal to the proceedings, and that because of it no jurisdiction was acquired.

The counsel for appellant insists also that the proceedings were void because no notice of the hearing before the referee was given to the lunatic. It is sufficient to say that the statute does not require notice. (Sec. 8.)

He also insists that the mortgage is void because no report was made to the court before the execution of the conveyance, as required by section 11. This seems to have been held to be the law in proceedings to sell infants’ real estate where the requirements ■of the statute are substantially like those of the law in question. (Stilwell v. Swarthout, 81 N. Y., 109; Battell v. Torrey, 65 id., 291.) We must, therefore, hold that this mortgage was void for this defect also.

We do not think the proceedings had in July, 1879, validated the former void acts of the committee.

The cases cited by the respondent upon this point are all cases where the court having acquired jurisdiction cured an irregularity nwncjpro timo. The power to do this is not denied, but that is not the power exercised here.

In this case the court undertook to validate this void mortgage after it had become due, and a suit was pending to foreclose it in which the defense of its invalidity had been set up. In these second proceedings none of the statutory requirements were observed, but they were simply supplementary to the .original proceedings and intended to fill up the gaps left in them when they were taken. We have been referred to no case which sustains this course.

The case of Bangs v. McIntosh (23 Barb., 591-601, et seq.) is an express authority against it. The case of Valentine (72 N. Y., 181) holds that where a purchaser under such proceedings has paid his money, and before the conveyance is made discovers that the proceedings are void, he may require proceedings to be taken de novo, or a return of the purchase-money, but that case is no authority for an amendment of the same proceedings after they are finished and a suit is pending to test their validity.

Whether it would permit the plaintiff to recover from Barnard as for money paid to his use, if it should appear that he actually had the benefit of this $1,500 and gave nothing but this void mortgage for it, we need not say.

We find no way to hold the mortgage good, and the judgment must be reversed and a new trial granted, costs to abide event.

Learned, P. J., and Osborn, J., concurred.

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


author: Rumsey, J.: Learned, P. J.:

text:
    SMITH SAUNDERS, Commissioner of Highways, etc., Respondent, v. JULIUS A. TOWNSEND, Appellant.

      Highway — action for obstructing it — what facts the defendant may controvert — Out de sac may be a highway — appeal from a justice’s judgment — the errors mast be specified in the notice of appeal — Code, sec. 353.
    Where, in an action before a justice of the peace to recover the statutory penalty ' for the obstruction of a highway, the defendant denies the existence of the ' alleged highway, and claims to own the land where the obstruction was placed, but fails to offer any bond when pleading his title thereto, he can only contest the fact that the land was used as a highway and the fact of the obstruction.

      A cuide sac may be a highway.

      A judgment of a Justice’s Court cannot be reversed on an appeal taken under section 353 of the Code of Procedure for an error in the admission of evidence not specified in the notice of appeal.
    Appeal from judgment of the St. Lawrence County Court, affirming the judgment of a justice of the peace.

      John C. Keeler, for the appellant.

      J. C. Scmnders, for the respondent.
   Rumsey, J.:

The action was brought by plaintiff, as commissioner of highways of the town of Lawrence, to recover of the defendant the statutory penalty for obstructing a highway in that town.

But one question is raised here by the appellant which we can consider. He insists that it was not shown that the place where the obstructions were placed was a public highway.

The alleged highway led from a public highway to a mill pond. The evidence of the plaintiff tended to show that it had been used as a highway for over twenty years, and that it had been worked ’ under the direction of the overseer of highways within six years before the suit.

Upon both of these points the evidence was contradictory and the justice found for the plaintiff.

As no bond was offered when the plea of title was interposed, that question did not arise in the case, and the only defense available to the defendant under the evidence given is the general denial, and under that he could controvert the user as a highway and the fact of the obstruction. (Little v Denn, 34 N. Y., 452, 461.) The plaintiff’s evidence was sufficient to establish its use as a highway for the purposes of this action. (Little v. Denn, supra.) It was a question of fact for the. justice (McCarthy v. L. S. and M. S. Ry. Co., 76 N. Y., 592), and we see no reason to interfere with his decision.

That the bous in quo wás a oul de sao did not prevent its being a highway. (People v. Kingman, 24 N. Y., 559, and cases cited.)

The error in the rejection of evidence insisted on by appellant cannot be considered. It is not specified in the notice of appeal. The Code of Procedure under which this appeal is taken required the gro.unds upon which the appeal is founded to be stated in the notice of appeal (sec. 353), and a judgment could not be reversed for an error not stated. (Avery v. Woodbeck, 5 Lans., 498.)

No other grounds for reversal than those considered above are urged here, and they are not sufficient to reverse the judgment. Judgment of County Court affirmed, with costs.

Osborn, J., concurred.

Learned, P. J.:

“Without saying that the objection to evidence could not be raised on this appeal, I think it could not be sustained, and concur.”

Judgment affirmed, with costs.


text:
    TEMPLE GROVE SEMINARY, Respondent, v. LOUIS H. CRAMER, as Receiver of Taxes, etc., and the TOWN OF SARATOGA SPRINGS, Appellants.

      Taxation — exemption of an incorporated academy from it — 1 It. 8., 388, see. 4— A temporary lease of the building does not deprive it of the exemption — When an action lies to restrain the collection of a tax under chapter 68 of 1880.
    A building which was originally erected and used for school purposes, and was thereafter conveyed to and used by an incorporated academy, created under the general laws of this State by the Regents of the University, is exempt from taxation under section 4 of 1 Revised Statutes, 388.
    The fact that the building is leased during the long vacation, extending from about the middle of June to the middle of September, as a boarding-house, does not subject it to taxation.

      Qiuere, as to whether the leasehold estate of the tenant would not be subject to taxation.
    Where a tax has been levied upon the property of such a corporation, and the assessment is valid upon its face, and the collector threatened to sell the same, as provided in chapter 68 of 1880, the association may, under section 8 of the said act, maintain an action to restrain the collection of the tax.
    Appeal from a judgment in favor of the plaintiff, entered on the decision of the court after a trial at a Special Term.

      A. Pond, for the appellants.

      C. S. Lester, for the respondent.
   Rumsey, J.:

The action is brought to restrain the defendant Cramer, as receiver of taxes of the town of Saratoga Springs, from selling the property of plaintiff to collect a tax.

The facts are, that the plaintiff is an incorporated academy, created under the general laws of the State by the Regents of the University. The real estate in question is owned by it, and consists of a lot of land on which is erected a building for the purpose of keeping a boarding-school. This building was erected for this purpose before the plaintiff was incorporated, but since the incorporation the premises have been used for a boarding-school as hereafter stated. The school term for 1878 commenced in September, and continued till June 19, 1879, during which term eighty-four pupils were instructed by a corps of nine teachers. The telm for 1879 began September 16, 1879, and continued until June 17, 1880, at which term ninety pupils were instructed. Since its incorporation in 1869, the school has been carried on in the same general way, the term continuing from September till about the middle of June in each year, and the vacation being from the middle of June till the middle of September. About the 1st of July, 1879, the seminary building was leased by Charles F. Dowd, who was president of the trustees and principal of the academy, to his son, Charles M. Dowd, till September 1, 1879, to be used as a boarding-house. It was so used during that time, but the use as a boarding-house was discontinued before the time for beginning the school; and such use does not seem to interfere with the use of the building or premises as an academy. While Charles M. Dowd thus occupied the premises, they were assessed to Charles F. Dowd, who lived in them at the same time.

The board of supervisors at its annual meeting in 1879, levied a tax of $194.69 upon that assessment. The warrant for the collection of taxes was issued to Cramer, and the tax not being paid he advertised the property for sale in the summary manner provided for by chapter 68, Laws of 1880.

This suit was brought to restrain the sale, upon the claim that the property is exempt from taxation. Judgment was entered as prayed in the complaint, and defendants appeal.

The first point raised by the appellant is that the court erred in denying his motion to dismiss the complaint, for the reason that it did not state facts sufficient to constitute a .cause of. action. We do not think that the motion should have been granted. The complaint stated the facts from which a conclusion of law might be drawn that the plaintiff’s property was exempt, and no fault was or could be found with it in other respects.

The appellants insist that the property in question is not exempt because the building was not erected for the use of an incorporated academy, although it appears by the proof, and is found, that the building was erected in the first place for the use of a seminary of learning, and that the plaintiff has used it for that purpose ever since it was incorporated.

The only question is upon the intention of the legislature to be gathered from the statute. There is no doubt that the laws which ■exempt property from taxation are to be strictly construed. (Cooley on Taxation, 146.) But in construing those laws, like all others, the intention is to be carried out above all things. All rules of interpretation are adopted because they enable the courts to discover the intention of the law-maker, and they should not be followed when they lead away from it. The intention of the legislature in this exemption was clearly to foster the establishment and main-' tenance of incorporated seminaries which should be under the visitation of the Regents of the University, to whom general control of these matters is given. The main purpose to be gained was the education of the youth of the State, and from the requirement that the institutions should be incorporated, it may be inferred that it was thought to be desirable that they should come under the supervision of the central authority. This building was from the first intended for a school. It was built for that purpose, and has been from the time of its erection used for the same purpose. Except for the fact that the owners of it were not incorporated until the school was established, the case is precisely within the words of the statute.

If the building now standing, should burn, and another one for the same purpose be built by plaintiff, the new building would be within the express letter of the law.

But the intention of the legislature would be no better attained by the new building than by the present one. We do not think the law calls for such exceedingly strict construction. The intention of the legislature, which is the advancement of learning, is best to be attained by holding, as we do, that this property is within the spirit of the statute, which exempts from taxation a' building erected for the use of an incorporated seminary of learning. (1 R. S., 388, § 4.)

The next point of appellants is, that the property was not exempt, because at the time the assessment was made it was used during the long vacation as a boarding-house.

The primary purpose for which this building was .erected and the use to which it was put for as much of the year as possible was a school-house. Its use for that object was never abandoned. If there was a temporary cessation of it, it was because the yearly vacation rendered it impossible to devote the building to school purposes during those two months. But such interruption of the use was not an abandonment by any means. For this reason this case is not within Old South Society v. Boston (127 Mass., 378), and cases of that kind cited by the appellant, where the property sought to be exempted had been devoted in whole or in part permanently to a different use than the one which the statute exempted. In this case the intention of the legislature was fully carried out. "During two months no school could be held in the building; it must stand vacant unless it was put to some other use. We see no objection to a temporary use -of it not inconsistent with its use as a boarding-school. So long as that is the principal use to which it is devoted, and it is put to tliat use for as great a'part of the year as is practicable and customary, the fact that during the long vacation, when it would otherwise stand vacant, boarders are kept in it and its usefulness for school purposes is not thereby impaired or interfered with, it does not become liable to taxation. (C. M. and St. P. Ry. Co. v. Supervisors, 5 N. W. Rep., 3.) If such use was a violation of its charter, which is doubtful, that fact does not take away the exemption. As was said in Town of New Haven v. City Bank (31 Conn., 106), the coi'poration may by such improper use of its property become liable to be dissolved, but the property does not cease to be exempt while the corporation exists and uses it.

But the defendants say that it was proper to assess Charles M. Dowd’s leasehold estate in the property. That may be so, but they have not assessed it. They have assessed the property itself to the occupant, and they seek to sell the. land and building to collect it. If the assessment had been of the leasehold estate of C. M. Dowd, entirely different questions might arise than are presented here.

We think the action is properly brought under the act of 1880. The assessment is valid on its face, the defendant Cramer threatens to sell under it, and the act authorizes, in express terms, the bringing of an action to vacate the assessment and restrain the sale. (Chap. 68, Laws of 1880, sec. 8.) It is difficult to see the force of this section if such an action as this cannot be maintained upon the facts appearing here.

The judgment must be affirmed, with costs.

Learned, P. J., and Osborn, J., concurred.

Judgment affirmed, with costs.


author: Osborn, J. :

text:
    JOHN GRIFFIN, Appellant, v. THE ROUND LAKE CAMP MEETING ASSOCIATION, Respondent.

      Costs — when proceedings stayed until the costs of a former action an'e paid.

    Upon an appeal to the General Term, from a judgment recovered in the Albany County Court, by one Perry against the defendant,- an order was entered on September 24, 1880, reversing the judgment, with costs, and on October 11, 1880, the costs were taxed at $273.58. Between the entry of the said order of reversal and the taxation of the costs, Perry assigned his claim, on which the aforesaid action was brought, to the plaintiff, who thereupon, and before the taxation of the costs, commenced.this action thereon in the Supreme Court. Both Perry and the plaintiff were insolvent.

      Held, that an order staying the prosecution of this action, until the payment of the costs of the former action, was properly granted.
    Appeal from an order staying the prosecution of this action until the payment of the defendant’s costs in a former action, brought by the assignor of the plaintiff herein.

      J. II. Gluts, for the appellant.

      I. Lawson, for the respondent.
   Osborn, J. :

The cause of action set forth in the plaintiff’s complaint has been once litigated between one Andrew J. Perry, the assignor of this appellant, and the respondent herein, and such litigation resulted in a judgment of the Albany County Court in favor of Perry and against the respondent. Upon an appeal from that judgment to the General Term of this court, an order of reversal with costs was duly entered September 24, 1880. The costs of the appellant in that action (respondent herein) were adjusted October 11, 1880, at $273.58.

Between the entiy of said order of reversal and the adjustment of costs thereunder, and on the 4th day of October, 1880, Perry assigned to this appellant the claim in suit, aud on the following day this action was commenced in the Supreme Court.

By the order appealed from, its prosecution has been stayed until the payment of the costs of the defendant in the Perry action.-

We think the stay was properly granted.

An assignee of a chose in action not negotiable, takes the demand subject to all equities existing between the parties to the contract. He stands in precisely the same position as his assignor. (Bush v. Lathrop, 22 N. Y., 535; Young v. Guy, 12 Hun, 325.)

Before the assignment by Perry to Griffin, the judgment of the Albany County Court had been reversed, and an order of reversal with costs had been entered. The right to costs had been determined ; the amount only remained uncertain. From this time the claim in controversy was subject to an equitable charge, and in case of another action by Perry upon the same demand, before the payment of the defendant’s costs in the former action, the equitable interference of this court could have been invoked and a stay of proceedings granted until the payment of such costs. (Edwards v. The Ninth ave. R. R., 22 How., 444; Richardson v. White and ano., 27 id., 155 ; McMahon v. Mutual Life Ins. Co., 12 Abb. Pr., 28; Foley v. Rathborne, 12 Hun, 589.)

The fact that the case at bar was commenced before the costs in the Perry action had been adjusted, cannot affect the defendant’s right to a stay. A second action could be easily put in motion, in almost every case, before the necessary notice of taxation had expired or the right to tax costs had become absolute ; and in such cases the court would protect the defendant.

We conclude that the claim on which the appellant asks to recover, came to him subject to an equitable charge in favor of the respondent, which was properly enforced by the stay granted, and in view of the undisputed insolvency of both Griffin and Perry, the discretionary power of the court below was justly exercised.

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

Learned, P. J., and Rumsey, J., concurred.

Order affirmed, with ten dollars costs and printing disbursements.


author: Learned, P. J.:

text:
    ISRAEL Y. CARR, as Assignee, etc., Respondent, v. GARRETT S. VAN HOESEN, Appellant.

      Attachment — what defects in the affidavits do not render it void — Action hy a general assignee to recover goods attached — the sheriff may show that the assignment was fraudulent as to creditors.

    Where an attachment is granted in an action commenced by the personal service of the summons upon the defendant, upon affidavits which are defective, in that they are verified by the plaintiff’s attorney, and state that the amount claimed is due over and above all counter-claims known to the deponent, the attachment is not thereby rendered void, but remains in full force and effect, unless set aside by the court upon a motion duly made.
    In an action brought by a general assignee for the benefit of creditors to recover goods seized by the sheriff under a warrant of attachment, issued against the assignor, the sheriff may show that the assignment was fraudulent and void as against the attaching creditors.
    Appeal from a judgment in favor of the plaintiff, entered on a verdict directed at the circuit, and from an order denying a motion for a new trial made at Special Term upon a case and exceptions.
    One Delmar W. Carr made an assignment for the benefit of his creditors to the plaintiff, January 22, 1880. On the 27th of January, 1880, Perry, Cook & Tower, creditors of Delmar W. Carr, commenced an action against him on contract. ' In that action they obtained an attachment against his property February 12, 1880, on the ground that he had assigned his property with intent to defraud his creditors. And on that day the defendant, the sheriff, attached the goods. Judgment in favor of Perry, Cook & Tower against Delmar W. Carr was recovered February 17,1880, and execution issued soon afterwards. On the 16th of February, 1880, this action was commenced for the wrongful taking of these goods. On the trial of this action the court refused to permit the defendant to show that the assignment to the plaintiff was fraudulent, and directed a verdict in favor of the plaintiff, the value of the goods being agreed upon. Upon a motion for a new trial the learned justice held that this ruling was erroneous, but denied a new trial, on the ground that the affidavit on which the attachment was obtained, was made not by the creditor, but by his attorney, and that it stated that the claim was “over and above all counter-claims known to deponent. Tbe defendant appeals from tbe judgment and order denying a. new trial.

      R. R. Buell, for the appellant.

      Waters & Knox, for the respondent.
   Learned, P. J.:

An attachment under the Code is not the commencement of a proceeding. It is a provisional remedy in an action which is-commenced by the service of a summons. The sufficiency of the-affidavit is not jurisdictional. (In Matter of Griswold, 13 Barb., 412; Furman v. Walter, 13 How., 352.) In the case of Van Alstyne v. Frwine (1 Kern., 331), cited by the learned justice, the attachment was issued under the Revised Statutes, and was the only process by which jurisdiction was acquired. In this present-case, on the contrary, jurisdiction was acquired of Delmar W. Carr, by personal service of a summons upon him. He might have-moved to set aside the attachment, if he had chosen to do so, but he did not. It was therefore valid against him, and that is enough for this case, so far as appeared on the trial.

Many cases are cited by the plaintiff where, on motion, attachments have been set aside. But these have no application. So-several cases are cited which have arisen upon attachments in Justices’ Court. But such attachments are the process by which jurisdiction is obtained. Here, as already stated, jurisdiction was obtained by the service of the summons. "Whether then, on the motion of Delmar W. Carr in the action against him, the attachment would have been set aside, it is unnecessary to inquire. It was not set aside, and that is enough between the present parties. It was certainly a justification to the sheriff if the property which he seized belonged to Delmar W. Carr. That presents the next question on which the plaintiff insists that the learned justice was correct upon the trial.

The case of Rinchey v. Stryker (28 N. Y., 45) is conclusive that the sheriff, having levied on goods and chattels under this attachment, could show that the assignment of the same to the plaintiff." was fraudulent as to the creditors who obtained the attachment. The same doctrine is held in Frost v. Mott (34 N. Y., 255), and in Hall v. Stryker (27 id., 596). The cases in the Court of Appeals cited by the plaintiff as altering that doctrine do not affect it in the least, or rather affirm it. The case of Thurber v. Blanck (50 N. Y., 80) only decides that when a debtor has fraudulently assigned a chose in action, the sheriff cannot levy thereon by attachment or bring an action to set aside the fraudulent assignment. The case recognizes distinctly the case of Rinchey v. Stryker (ut supra), and repeats that in the case of personal chattels the sheriff seizes the property,” and the creditor may defend the lien obtained by the attachment and levy.” The decision in Castle v. Lewis (78 N. Y., 131) is to the same effect. That decided two eases. In the first the assignment was not claimed to be fraudulent. In the other the assignment was of a chose in action. The case of Ocean Bank v. Olcott (46 N. Y., 12) decides nothing on this point.

The language of Deutsch v. Reilly (57 How., 75), cited by the plaintiff, is in direct conflict with the settled law of the Court of Appeals.

The sheriff, under an attachment, can levy on goods and chattels. He thereby acquires a specific lien. Having such specific lien he •can show that, as to the attaching creditor, the goods and chattels are the property of the debtor. But, if the debtor has assigned a bond and mortgage or chose in action, the sheriff under the old Code could not levy on this by his attachment, or bring an action to set aside the assignment according to the decision of Thurber v. Blanck (50 N. Y., 80). How this may be under the new Code we need not inquire.

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

Present — Learned, P. J., Rumsby and Osborn, JJ.

So ordered.