text:
    THE RECTOR, Etc., OF THE CHURCH OF THE REDEMPTION, Appellant, v. THE RECTOR, Etc., OF GRACE CHURCH, Respondent.

      Act of 1813 — unincorporated religious society — trusts for benefit of— chap. 122 of 1850 — propm'ty held by corporation in ti'ust undm' — when title of, divested,

    The provisions of the act of 1813, providing for the incorporation of religious societies, authorizing property, both real and personal, to be held in trust for an unincorporated religious society, were not affected by the Revised Statutes and are still in force.
    It is not necessary that the deed should show that the property is held in trust for the society, nor does the statute require written evidence of the fact; it may be proved, as other facts, by any pertinent evidence.
    By virtue of that act all property, held by natural persons in trust for any unincorporated religious society, vests in such society immediately upon its incorporation.
    But where property is acquired and held by a religious corporation in trust for an unincorporated society or congregation, in accordance with the provisions of chapter 122 of 1850, its title thereto is not divested by the incorporation of such society or congregation, unless that be done with the consent of the vestry or trustees of the corporation holding the legal and formal title to the property.
    It is the consent of the vestry as a body, not that of the individual members thereof, which the act requires.
    The act of 1850 confers the power, of holding property in trust for an unincorporated religious society or congregation, upon religious corporations formed under the general laws of the State, as the same existed before the act of 1813, as well as upon those afterwards incorporated under the provisions of the said act.
    Appeal from a judgment in favor of tbe defendant, entered upon tbe trial of tbis action at Special Term.

      The action was brought by plaintiff to establish and have declared, its rights in and to the church building on the south side of Fourteenth street, between Third and Fourth avenues, in the city of New York, and also to certain personal property, consisting of carpets, an organ and other furniture in use in said church, of the use and enjoyment whereof the plaintiff had been wrongfully and unlawfully deprived by defendant.
    During the pendency of the action the property was destroyed by fire, and the defendant having collected large amounts of insurance on the building and furniture, the facts were alleged, and the benefit thereof claimed by plaintiff by supplemental pleading.

      G. <& G. P. Traoy, for the appellant.

      Clarkson N. Potter, for the respondent.
   Daniels, J.:

The plaintiff in this action claims to have been a religious corporation, existing in the city of New York since 1864. And the defendant has been a religious corporation of that city since 1809. Each claims title to a lot of land situated upon Fourteenth street, betweén Third and Fourth avenues, and the church edifice erected on it. The plaintiff was excluded from its possession and occupancy in the year 1868, by the defendant, and brought this action for the purpose of procuring an adjudication confirmatory of its title, and for a formal conveyance of it by the defendant. In 1859, the land was conveyed by deed to the defendant, and ever since then it has claimed to be the legal and equitable owner of the property, and, as such, entitled to exclude the plaintiff from its possession. The land was purchased and the title to it acquired for the purpose of erecting upon it a church edifice, to be used as an Episcopal free church. And it was so maintained from the completion of the edifice, in the year 1861, to the time of the incorporation of the plaintiff, in 1866, and substantially so until the time of the plaintiff’s expulsion from it.

For several years before the land was acquired and the edifice erected upon it, a congregation had been' collected together as a mission, or free church, of the defendant, which mission had, to a considerable extent, been dependent upon defendant for support and fostering care. This congregation had occupied rented rooms or halls for its religious services, until it had acquired such size and proportions as to require more ample facilities in that respect. And for the purpose of meeting and providing for this necessity, the land in question was purchased, and a church edifice built upon it. The mission congregation and the defendant combined their efforts for the accomplishment of these results. The cost of the land was $21,500; of that amount the defendant paid $14,000, which it held for the maintenance of a free church, and the congregation raised, by voluntary contributions and subscriptions, the residue of $7,500. The cost of the church edifice built upon the land was $57,711.15; $15,000 of this amount was raised by a loan made upon a mortgage given by the defendant upon the property. About $17,000 of it was voluntarily contributed by members of the mission congregation, and others moved by their solicitations ; and the residue of about $26,000 was paid by the defendant, and through its instrumentality.

The contributions secured from all sources appear to have been made for the purpose of building up a free church under the auspices and protection of the defendant. The appeals, so far as they were made by the rector and members of the congregation, were founded upon that profession, and the moneys, were supplied to secure that object. During the time when the contributions were solicited and obtained, and also before the enterprise of procuring a site and erecting a church edifice was undertaken, the congregation was known and called: “Astor Place Mission,” “Astor Place Congregation,” “ The Congregation of the Astor Place Protestant Episcopal Mission Church,” and “ Mission Chapel connected with Grace Church.” And when it went into the possession of the church edifice it was called the “ Free Church of the Redemption; ” and inscribed over its principal entrance “Protestant Episcopal Free Church of the Redemption.” That continued to be the name of the congregation until its alleged incorporation, when the name of “ The Rector, Church Wardens and Vestrymen of the Church of the Redemption ” was adopted. Under that name it has, for much of the time since, maintained its existence; and communications, were received by the vestry of the defendant from its officers in that name ; and it was referred to as the Church of the Redemption in proceedings taken by the defendant’s vestry.

These are most of the leading and controlling tacts established by the evidence given in this case, and under them the plaintiff claims that it could not be lawfully excluded from the use and enjoyment of this church property. This exclusion was really of the body corporate, and its adherents in the disagreement (which arose first in November, 1866, and continued until the defendant took possession in 1868), concerning the conduct and management of the society. Those opposed to the action of the corporate authorities, and the members of the congregation sustaining them, appealed to the defendant to interfere, by virtue of its proprietary title ; and it did so, in order to terminate dissensions which seemed incapable of amicable adjustment. And after that the free church service was resumed, and continued under its controlling authority.

The learned judge before whom the cause was tried, held that no valid trust could exist in the property while it was held by the defendant for the use of the congregation, and for that reason the plaintiff could acquire no interest in it by virtue of its incorporation. As a general legal proposition this was undoubtedly the law. Eor it has been held in several instances that a use or trust could not be lawfully created for the benefit of a mere voluntary unincorporated society or association. But as to religious societies that is not so clearly the law. They are exceptional in this respect by reason of an early provision made in their favor, contained in the laws providing for the organization and creation of religious corporations. By this provision a very clear implication was made in favor of the validity of such a use of property. It was the understanding of the legislature enacting the law, that property, both real and personal, could be lawfully held for the use of an unincorporated religious society, without any restriction as to time, except that the use should be terminated by its lawful incorporation. In that event, the trustees of every congregation or society previously mentioned, and which included the church wardens and vestrymen of Episcopal churches, who were previously designated as trustees, were “ authorized and empowered to take into their possession and custody all the temporalities belonging to such church, congregation or society, whether the same consist of real or personal estate, and whether the same shall have been given, granted or devised directly to such church, congregation or society, or to cmy other person for their use; and also by their corporate name or title, to sue and be sued in all courts of law or equity, and to recover, hold and enjoy all the debts, demands, rights and privileges, and all churches, meeting-houses, parsonages and burying-places, with the appurtenances, and all estates belonging to such church, congregation or society, in whatsoever manner the same may have been acquired, or in whose name soever the same ma/y be held, as fully and amply as if the right or title thereto had originally been vested in the said trustees. (2 R. S. [5th ed.], 607, § 4; Revised Laws of 1801, vol. 1, 340, § 4; see, also, the proviso at the end of section 1, in which the vestry is designated as a board of trustees.)

If property could not lawfully be held in trust for the use of an unincorporated religious society or association, this provision authorizing and empowering the trustees, upon the incorporation, to take possession of such property, would be a meaningless absurdity. And that was clearly not the understanding of the legislature. What it designed was to provide for a state of things which might be found as lawfully existing at the time of the incorporation ; and that was to act upon and terminate all such uses by vesting the title absolutely in the corporation. Without such a valid use, the trustees could not take possession of the property, and it would not have been within the scope of legislative power to confer that authority upon them. But with it, the property devoted to the use would equitably belong to the corporators, and could well be vested in the corporation as soon as it should be created. The statute was intended to transfer the title to all such property, because it could be held for the use of the society previous to its incorporation, and might be placed in the name of any person for that purpose. This use was protected and maintained until a corporate body should come into existence by the action of the society, in which the title could be absolutely vested, and then it was provided that a transfer of it by operation of law should at once take place.

That this was the construction required by the statute before the revision which was made in 18-30 will not probably be any where denied. And under the circumstances no’ good reason exists for concluding that any change was then intended to be made in it. It was not revised neither was it repealed by any direct action of the revisers or the legislature. But what was done with it was to continue it in force as it had previously existed, and that was not consistent with the theory that it should be changed or modified by mere implication. The alterations, which were then intended to be made, for the government of religious societies, were expressed and designated. But no intei-fereiice was attempted with the provisions of the previous laws concerning religious societies and corporations. If any had been designed by the provisions made concerning trusts and future estates in real and personal property, something would undoubtedly have been expressed declaratory of the existence of that purpose. But nothing of that kind was at any time done. The laws concerning religious societies and corporations had matured into a useful and convenient code which it seems to have been supposed could not be materially improved by changing them. And the provisions providing generally for a different disposition and use of property were not apparently extended so far as to affect them.

Nothing better or more complete in their nature could well have been devised, and both the revisers and the legislature left them as they were. The system had worked well and had been free from abuse, and no reason appeared for abrogating it.

To this extent what might be called a charitable or religious use of property, appears to have been sanctioned by the written law of the State. And such was considered to be its effect by the courts that have been called upon to apply it. (Baptist Church in Hartford v. Witherell, 3 Paige, 296; Dutch Church im, Garden St., 7 id., 77; Tucker v. Rector, etc., of St. Clement's Church, 3 Sandf., 242, 251.) It has been urged that a different view has been maintained- in the Court of Appeals. But neither Williams v. Williams (4 Seld., 525), Bascom v. Albertson (34 N. Y., 584), Gram v. Prussia Lutheran Society (36 id., 161), or Levy v. Levy (33 id., 97), or any other authority cited or found in which the point has been involved, will sanction that position as to property devoted by gift or grant to the use of an unincorporated religious society. The statute sanctions that disposition of property only when it may be given or granted for the’use of a religious congregation or society. To that extent alone it has been the purpose of the legislature to sustain the intended use. .The enactment on this subject is in the nature of a special provision not liable to be repealed or changed by mere general legislation containing no reference whatever to it. (Matter of Commrs. of Central Park, 50 N. Y., 493; Williams v. Williams, 4 Seld., 532, 533.)

And by various • amendments and alterations it has been treated by the legislature as all the while in force.

This provision of the revised laws did not render the right of the society to the property, after its incorporation, dependent on the fact that by the deed it should appear to be held for the use of the society. But the right was made to depend wholly on the fact of the property being held for the use of the congregation or society in its unincorporated state. When that proves to be the case, the statute acts upon the title and at once transfers it as soon as the corporation may be formed; and as the statute does not require written evidence of the existence of the fact, it follows that it can be proved, as facts ordinarily are, by any .evidence pertinent for that purpose. (Foote v. Bryant, 47 N. Y., 544.)

In this case it clearly appeared, that the land was acquired and the church erected for the use of the Astor 'Place congregation. Its own committee superintended the building of the edifice, and had the active management of the business connected with it. And near the time of its completion the congregation took possession of the basement for its religious services, and afterward of the upper portions of the building as soon as it was in a proper condition for use. Near that time the defendant’s rector preached in the new edifice, and admonished the congregation that it must depend upon its own resources from that time, without expecting further aid and assistance from the defendant; and it did so, and occupied the building and controlled its use, in all respects the same as it would be expected to do with property held solely for its occupancy and enjoyment. That continued without interruption or disturbance, until after the decease of the Bev. Mr. Dickson, who had been the rector employed by the defendant for the congregation, since the time when its numbers had increased so as to require the continued services and attention of a clergyman. This occupancy-and enjoyment of the property extended from the time of the completion of the church edifice in 1861, until the latter part of the yeah 1866, without the least question of the right of the congregation to it, or any objection whatever on the part of the defendant; but, on the other hand, it was attended with the apparent acquiescence and approval of the defendant during the whole of that period of time; and with the facts which transpired before the ground was purchased, the object for which the purchase was made, and the manner in which the building of the church edifice was superintended, clearly established the conclusion that the property was procured and held for the use and benefit of this congregation: and the unrestrained effect of the act of 1813 would have vested it in the corporation upon its formation, whenever that was regularly done, subject to the equities of the defendant for the reimbursement of any investments made by it, and not designed as donations to the Astor Place congregation.

But at the time when the property was procured, and when the corporation was claimed to have been formed by the members of the corporation, that act had been modified and restrained by further provisions, under which the defendant seems to have proceeded. One of these was contained in chapter 230 of the Laws of 1855, which, assuming the legality of uses in property for the benefit of religious congregations and societies, required the conveyance, devise or lease to be made to a corporation, and, when previously made to an individual, terminated his title with his decease. (Id., §§ 2, 3.) It is not important, however, to examine this act critically, because none of the provisions contained in it, were in the least transcended in the conveyance or use of this property, and the act itself was repealed before the incorporation of the plaintiff. (Chap. 147, Laws of 1862.)

This repeal would probably have fully restored the provision made by the act of 1813, for the investment of the title to property held for the use of the congregation in the corporation, upon its formation, were it not for another provision affecting the case, and still continued in force. That was, in the first instance, enacted in 1850, and was, undoubtedly, the principal, if not exclusive authority under which the defendant took its title to this property, and which must be controlling in its effect upon the present controversy. (Laws of 1850, chap. 122, § 2.) It was amended, by making it more comprehensive, in 1860. (Laws of 1860, chap. 235.) But all that can be applicable to this case was contained in the law when it was first enacted. By that it was provided that, whenever any religious corporation, incorporated under the £ act to provide for the incorporation of religious societies,’ passed April 5, 1813, or by any special charter, shall deem it necessary or expedient, for the accommodation of its members, in consequence of their number or dispersed habitations, or otherwise, to increase the facilities for public worship, the vestry or trustees thereof may purchase and hold grounds in the same village, town or city, and may erect thereon suitable associate meeting-houses or churches or convenient chapels, or may hire, or purchase and hold any such grounds, with suitable buildings already erected thereon, for the like purpose, notwithstanding any restriction contained or supposed to be contained in the said act, or in any such charter, and the persons statedly worshipping in any such associate meeting-house or church, or in such chapel, may, with the consent of the vestry or trustees of said corporation, be separately organized and incorporated.” (Laws of 1850, 196, § 2.)

By its terms this act conferred the power created by it only upon religious societies incorporated by special charter or under the act of 1813, which, upon the facts as they were found by the court, might nominally exclude the defendant were it not for the conces-. sions made by the pleadings. The court found the incorporation of the defendant to have taken place under the law of this State for the incorporation of Episcopal churches, passed on the 27th of March, 1801,-while the complaint alleged that the plaintiff was incorporated under the general laws of the State which, from subsequent allegations, was shown to have referred to the act of 1813; and it also averred that the defendant was organized by and under the same laws. This was not denied, but the defendant simply admitted its incorporation under the general laws of the State. By not denying the fact, as the plaintiff alleged it, the Code required that it should be taken as true for the purposes of the action (Code, § 168), and that, probably, would be sufficient to entitle the defendant to be considered a corporation formed under the act of 1813 for all the purposes of section 2 of the act of 1850.

But it is not necessary that the case should be allowed to rest upon an advantage so narrowly secured by the defendant. A broader construction should be given to the act of 1850 than the literal import of the terms used in it, would seem to justify or require. That is rendered reasonably evident from the circumstance that the act of 1813 included the act of 1801 for the incorporation of religious societies, re-enacting and continuing it with additional sections. (1 Rev. Laws 1801, 336, chap. 79; 2 R. S. [5th ed.], 601-610.) From that time the act of 1801 was only in force by means of the act of 1813, of which it formed the most material part, and in a general sense it was consequently true that the religious corporations of the State existed in 1850 under the act of 1813, or by virtue of special charter, and the reference made in the section quoted from the act of 1850 therefore included religious corporations formed under the general law of the State before 1813, as well as those afterward incorporated by virtue of the provisions of the law of 1813. This construction is sustained by the further consideration that no reason whatever existed for distinguishing the churches incorporated under the act of 1801 from those acquiring like character after the enactment of the law of 1813. If it were advisable or proper that one class should have the power provided by section 2 of the act of 1850, it was equally so that it should be given to the others. No reason for any discrimination appears from the design or purposes of the act; but in its enactment the, legislature undoubtedly considered that all would be alike included by the reference which it contained. That was the intent designed in part to be accomplished by the enactment; and the manner in which the act of 1813 was framed, as well as the language of one of its sections, re-enacted from the preceding- law of 1801, justified the legislature in concluding that it could be fully secured by the reference contained in section 2 of the act of 1850. That language was, that every religious corporation of any church, congregation or religious society heretofore made in pursuance of any law of this State and in conformity to the directions contained in this act shall be, and the same is, hereby established and confirmed, and such corporation shall be deemed to have commenced from the time of recording such certificate, etc. (Laws of 1801, vol. 1, 343, § 11; 2 R. S. [5th ed.], 610, § 13.) The provision is precisely the same in both these acts ; and it was an adoption, by the act of 1813, of all the corporations previously formed by conforming to the requirements of the act of 1801.

The facts, proved by the evidence and found by the court as established, presented an emergency for the action of the defendant, which was very clearly within the scope and intent of the section quoted from the act of 1850. They showed that one of its parishioners, John W. Mitchell, with the aid and co-operation of its rector, the Reverend Doctor Taylor, opened a Sunday-school at the Seventh Day Baptist Church, on Eleventh street, in the year 1852, which soon succeeded in collecting together the parents of the children and others for religious worship. And the Reverend Robert G. Dickson was employed by the defendant for the purpose of conducting the services. This selection proved well adapted to the work to be performed, and the result was, the Astor Place congregation, for whose accommodation and convenience the church property in controversy was obtained, and the church edifice erected upon it. And all that, the defendant was empowered to do by the spirit of the provision contained in the act of 1850. Since then, the provision has been so far extended as to provide in terms for such Sunday-school enterprises, as proved to be the first step in the formation of the congregation brought together in part by its instrumentality. (Laws of 1860, chap. 235.) But in all other respects the original section has been allowed to x’emain unchanged.

The defendant found itself with a large congregation, formed under its auspices, and dependexxt upon its patronage and assistance. The persons composing it were substantially its members requiring increased facilities for public worship beyond those owned by it or hired for the new congregation. And to supply the necessity the land on Fourteenth street was procured, and the edifice built upon it by the co-opei’ation of both the defendant, and the active members of the mission congregation, including its rector. This was all within the very ample authority given for the purpose by the second section of the act of 1850. And it rendered the property subject to what was provided in it, so far as that modified the provision made for the disposition of church property, by the preceding acts of 1801 and 1813, held for the use of an unincorporated congregation or society. So far as such property may be held by natural persons, for the use of such a congregation or society, it seems to be still controlled by the act of 1813, which vests it at once in the corporation as soon as that may be lawfully formed. But as to property acquired by a religions corporation, for the use of an unincorporated society or congregation, the same consequence does not follow. It was undoubtedly contemplated and intended, by the act of 1850, that the corporation formed by the society should eventually succeed to the title of the property procured, and held for the use of its preceding unincorporated congregation. The act does not in terms declare that to be the case, it is true. But it does not in that respect interfere with the effect given to the incorporation of the society under the preceding law, beyond the condition it imposes, that it shall only be done with the consent of the vestry or trustees of the corporation holding the legal and formal title to the church property. "When preceded or accompanied with that consent the property would probably vest in the new corporation, as all church property held for the use of the congregation has been declared to vest, by the fourth section of the act of 1813.

But without that consent the corporation could not be organized by the congregation so as to entitle it, as a matter of strict right, to the property held for the use of the congregation. The statute is clear and explicit on this subject, giving the congregation the right of separate organization and incorporation, only with the consent of the religious corporation under whose fostering care it has been collected and created; upon that being obtained, and a corporation being formed, an independent career will be at once commenced. But without it no right can be secured to succeed to the church property.

In this case it was not claimed that any such consent was obtained before the corporation was formed under the name of the Church of the Redemption. And the judge, before whom the cause was tried, expressly found, that there was no such consent. This conclusion is urged by the plaintiff’s counsel as an erroneous one, under the evidence, which it is claimed establishes the performances of acts from which the consent may be inferred.

The consent which the statute rendered necessary for the lawful incorporation of the plaintiff was that of the defendant’s vestry, as distinguished from that of individual members of it, and it was contemplated, that it was either to precede or accompany the formation of the corporation. There was no such consent shown or claimed in the case. And upon no occasion afterward, did the defendant’s vestry act upon or consider this matter. Corporate action is what the law evidently required, and that has never been taken upon this subject.

The first certificate of incorporation was made and filed in 1861; but that was found to be defective and another was made and filed in its place on the 2d of April, 1866. The defendant’s vestry undoubtedly understood that formal proceedings had been taken to incorporate the congregation, and that it claimed to have become an incorporated society; but the existence of that knowledge, without any objection being made to the incorporation, fell very far short of proving the consent, which the statute by express terms had required.

A legacy of $1,017.50 was given by the will of Mrs. Susan M. Parish, to the vestry of Grace church, for the use of its free chapel. It was partially expended in improvements about the new church edifice. In April, 1865, a balance of $269.12 remained on hand, and the defendant’s vestry resolved that it should be paid as.a donation to Mr. Dickson, rector of the Church of the Redemption, and the treasurer, in January, 1866, reported that he had so paid it. This seems to have been the only favorable action taken by the vestry concerning the new corporation, and it occurred while it was under the defective certificate, which the convention declined to accept as a lawful act of incorporation. It was an incidental recognition of the fact, that there was such a church as the plaintiffs claimed to be, but it was only for the purpose of paying to its rector an amount of money, held by the defendant for the use of the free chapel; and the mode adopted was, substantially, giving the congregation the benefit of the money. From this act it cannot reasonably be inferred, that the vestry intended to convey or give its consent to the formation of the corporation. It could mention, indirectly, what had been done, without involving itself in the expression of a consent, which had never been applied for.

The other acts relied upon are still less favorable to the plaintiff’s case, and occurred after the death of Mr. Dickson, which happened in April, 1866, and when serious differences had arisen in the society, concerning the choice of his successor. It is not at all probable that any consent would have been obtained for the act of incorporation while that state of things continued, and which, in the end, resulted in the defendant’s vestry taking actual possession of the property.

. The vestry of the defendant was appealed to for assistance in the disagreement whicli existed; and without any definite action being taken, the wardens and-five of the vestrymen of the new church sent in their resignations to the defendant’s vestry. That act, instead of indicating the existence of the consent, essential to the formation of the corporation, rather tended to show a conviction of continued dependence, entirely inconsistent with the theory that consent had ever been secured. If it had been, the defendant’s vestry was not the body to which the resignations should have been delivered. Other communications were made to the vestry of the defendant, but the latter on no occasion did any thing from which it can justly be inferred, that it intended to give the consent the statute required, in order to render the proceedings of the congregation for its incorporation lawful. The law required some affirmative action for that purpose. The act was to be attended with important results, and required caution and deliberation before it could be properly performed. It may have been contemplated, and the congregation may have relied upon its ability to secure the requisite consent, whenever it should be applied for; but as long as the vestry never gave it,' the plaintiff secured no legal right to the property which the congregation had used. The vestry could properly express itself only by direct action, or such long continued acquiesence, as to the fact of incorporation, as would be equal to that in its effect, as evidence of consent, and leave no room for doubt as to its intention in that respect. And neither appeared in this case. It followed, from the want of it, that the defendant’s tenure of the property had not been changed. It continued to hold it for the use of the congregation, and not for the plaintiff, even if it can ever be said to have had any existence whatever as a corporate body. The attempt was to form a corporation for the acquisition and control of this property, and its management for the convenience and use of the society. But that it failed to accomplish.

It was not asserted, that the defendant deprived the congregation of the use of the church property. If it did, the remedy would be by a different action. As long as it is charged with nothing of that kind, no well grounded complaint can exist against it. For the congregation will still be secured the full benefit of all its contributions, by enjoying the advantages intended to be secured by them.

The objection, that the defendant owns a larger amount of property than it has the capacity to hold by law cannot aid the plaintiff’s action. That is a matter which the State alone can take advantage of, after the title has become vested, as it clearly had in this case. (Humbert v. Trinity Churchh, 24 Wend., 587, 629.) But the objection itself has no foundation to rest upon. This property was acquired and held under section 2 of chapter 122 of the Laws of 1850, and that expressly relieved the defendant, in taking it for the purposes mentioned in the act, from any restrictions contained in the act of 1813.

It appeared that the congregation purchased an organ, a melodeon, Sunday-school library and other articles used in the church for which the plaintiff insists it could recover, even if it cannot maintain the claim made to the church property. But no sufficient reason can be found for distinguishing that from the land and the edifice in which these articles were placed. They were purchased by the contributions of the congregation, in order to complete the enterprise the defendant was engaged in consummating for its use and benefit, and became a part of the general property acquired for that purpose and intended to be held as the,rest of it was. At least no evidence of any different intent was given in the case.

The defendant took no further possession of these articles than it was obliged to for the purpose of obtaining possession of the land and church edifice. They went with the possession of the church, because they were in it and incidental to it, and do not seem to have been separately claimed by the plaintiff. And the defendant held them for the benefit of the congregation, which had the equitable right to use them.

Then as long as the incorporation of the plaintiff was not preceded by, accompanied or sanctioned with the consent of the defendant, it could not lawfully claim against the defendant any portion of the church property. The same disability existed as to the personal, as prevented it from obtaining the real property.

The action, too, was not brought for a conversion of the property, but for an accounting in equity. And'if it had been, by a mere exclusion of the plaintiff from the occupancy of the church which contained the personal property, no conversion was in fact established. The defendant took the property, to maintain the use for which it was procured, and the plaintiff has no such interest in it as will enable it to contest the defendant’s right to do that.

The fact that the church edifice was destroyed by fire on the night of December 24, 1872, does not change the legal aspect of the case in any respect. At least it has rendered it no more favorable to the plaintiff. It appeared that the edifice, organ and other personal property were insured by the defendant, and the insurance money collected upon the loss. By supplemental complaint the plaintiff claimed those moneys, but as they were paid upon the policies insuring only the defendant’s interest in the property, this claim of the plaintiff, for that as well as the other reasons already given, cannot be maintained. The most that can be claimed is that the money shall be applied to rebuilding the edifice, and replacing the organ and furniture, for the use and convenience of the congregation.

The appeal taken from the judgment cannot be sustained. The judgment should therefore be affirmed, with costs.

Davis, B. J., and Beady, J., concurred.

Judgment affirmed, with costs.


source: Caselaw Access Project

author: Daniels, J.:

license: Public Domain

text:
    JOHN H. ROSS, Appellant, v. CORNELIUS P. ROSS and another, Executors, etc., Respondents.

      Code, § 899 — services rendered —presumption as to promise to pay for.

    In an action brought by a physician, to recover for services rendered to defendants’, testator, he was asked whether he treated the testator professionally within the six years next preceding his death. Held, that the question was properly excluded, as inadmissible under section 899 of the Code.
    Where it appears that for a portion of the services included in the account no charge was intended to be made, it cannot be presumed that it was intended to charge for the others. In this respect, one part of the account cannot be legally distinguished from the other.
    Appeal from a judgment in favor of the defendant, entered upon the report of a referee, made upon a reference of a claim against . the estate of the defendants’ testator.
    AC A. Halbert, for the appellant.

      Ohas. H. Glover, for the respondents.
   Daniels, J.:

The claimant and appellant is a son of the testator, and claimed compensation from the executors of his estate for services performed by him as a physician, in attending upon and prescribing for the testator and his wife. To sustain the claim made, he was sworn as a witness, and asked whether he treated his father professionally within the six years next preceding his death. He was objected to as incompetent to answer the question under section 399 of the Code of Procedure. The objection was sustained, and an exception taken to the decision of the referee, and that exception is now relied upon in support of the application made on the part of the appellant for a reversal of the judgment. But it is very clear that the inquiry made related to a personal transaction between the witness and the deceased testator, upon which he was not competent to give evidence, according to the section of the Code just referred to. If the evidence could have been taken, the direct tendency of it would have been to prove that he performed service about his father’s person, from which the law might imply a promise on the part of the latter to pay, while, if he were living, his own evidence might disprove hoth of such facts. The policy of section 399 is to prevent the estates of deceased persons from being rendered liable by evidence of that description, proceeding from the surviving party to such a transaction. Where that has been had personally with the deceased, the liability of the estate on account of it, if established at all, must be shown by the evidence of persons who are not parties asserting and endeavoring to sustain the claim made. The rule is a very salutary and proper one, and it has been rigidly adhered to in the administration of the laws, and, under it, the question was very properly overruled. (Dubois v. Baker, 40 Barb., 556, 562; Stanley v. Whitney, 47 id., 586, 588; Dyer v. Dyer, 48 id., 190; Resseguie v. Mason, 58 id., 89; Elmore v. Jaques, 9 S. C. [2 Hun], 130; Howell v. Van Siclen, ante, p. 115.)

When the evidence of the claimant was rejected upon this portion of the claim made by him, he was allowed to state that he visited and attended his mother, as her physician, nine different times in 1871 and 1873. At that time he lived in Brooklyn, and she resided with her husband, the testator, in Plainfield, New Jersey. He also stated that he made an entry after each visit in his pocket-diary, charging ten dollars for it, and that each visit was reasonably worth that sum. He stated that he was requested by his four brothers to make such visits, but they were sworn as witnesses and denied that statement. It was also proved that the claimant’s mother was attended by Dr. Stillman, a physician who, at 'the time, resided at Plainfield, and that he himself, on one occasion, went to procure his attendance for her. It was not shown that the testator knew, that the claimant attended his wife in his professional capacity as a physician, or that he in any way whatever, sanctioned or approved of such attendance. And it was proved that on two several occasions, after a portion of the alleged visits had been made, that he borrowed money from the testator, and gave his note for one loan of $2,000, and his bond for another of the same amount. The referee found that no promise could be implied from these facts, on the part of the testator, to pay any part of the claim made and reported in favor of the executors. The claimant excepted to the report for the reason, that a promise to pay him should have been implied and judgment directed in his favor. It is difficult to discover how the referee could have made any different decision than he did. The testator was not shown to have even known of the professional visits, alleged to have been made; and he had provided his wife with another physician who had attended her at Plainfield, and of whose employment the present claimant was not ignorant. That was all which, under ordinary circumstances, the testator was bound to do. And his wife did not appear to desire any thing further, for it was not pretended that she had requested the claimant to attend her in his capacity of a physician. The only employment he claimed has been made, was by the request of his brothers, which they all denied making. Then, if he had really designed to have charged the testator for the visits made by him, those which preceded the loans should have then been brought forward and adjusted. The presumption is, that he would then have presented his account for payment if he in truth considered the testator to be his debtor. He wanted money, and if it could be in part secured by collecting a debt, and in that way reducing the amount he otherwise required to borrow, the natural course would have been to resort to that alternative. That he did not then make any claim was a circumstance subjecting the one made to the executors to very serious suspicion, and, together with the other facts appearing, fully justified the referee in rejecting it. The probability that he expected to be paid by his father for his professional visits to his mother, or that she expected that any charge would be made by him for them, is very slight, when unaffected by any other fact than his filial relationship. And with the others, appearing from the proof, that probability has been completely overcome. If the services were performed at all, they were undoubtedly bestowed by the claimant in obedience to his manly impulse to serve and benefit his mother, by generously doing for her whatever his skill and experience enabled him to perform, and without the expectation of pecuniary recompense from her, or his father’s estate. The claim made for payment was probably an after thought, which he mistakenly supposed could be rendered successful. Hut in that respect the law will not sustain him.

His own conduct is sufficient to defeat the portion of the demand accruing before the loans were made, and there is nothing in the evidence tending to show the remainder to be in any respect of a mere meritorious character. If there was no design to charge for the former, it cannot be presumed that there was for the latter. In this respect, one part of the account cannot be legally distinguished from the other, and for that reason no promise to pay either can be reasonably implied. (Williams v. Hutchinson, 3 Comst., 312, 317, 318.) In Moore v. Moore (21 How. Pr., 211), which in its leading features closely resembles the present case, Judge Wright, in delivering the opinion of the Court of Appeals, held that “ordinarily, from the fact of rendition and acceptance of services beneficent in their nature, the law will imply a promise to pay what the services are reasonably worth. This implication may not be repelled wholly by the fact that the service is rendered to a parent by a son less of full age, but the legal presumption of an obligation to pay is strong, when the relation of parent and child exists, than in the case of dealing between persons not bound to each other. If to the relationship be added other circumstances tending to show, as a matter of fact, that the services were gratuitously rendered, and without - any expectation, at the time, on either side, that payment was to be made, the law will not imply a contract for compensation. (Id., 223, and Candoss Appeal, 5 Watts & Serg., 513; Bowen v. Bowen, 2 Bradf., 336; and Estate of Kelley, Tucker, 28, are to the same effect.) This principle is entirely controlling in this case, and the judgment should be affirmed, with costs.

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

Surrogate’s decree affirmed with costs to the respondents, the executors.


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    GEORGE FOWLER and others, Respondents, v. THE NEW YORK GOLD EXCHANGE BANK, Appellant.

      Loan — what constitutes.

    The plaintiff agreed, September 23,1869, to sell and deliver $50,000, in gold coin, to C. & Co. for $70,625, in currency, the gold to be delivered and the currency received September twenty-fourth. The parties were members of the G-old Exchange, under whose rules such contracts were to be cleared by the defendant, for which purpose notes of the transaction were to be delivered to the defendant by the vendor and vendee, and also the amounts paid over by the parties to the defendant. The defendant, distrusting its ability to settle the transactions of September twenty-third (Black Friday), requested its customers to settle their sales between themselves. The plaintiffs, therefore, did not deliver any notice of this transaction to the defendant, but C. & Co. did deliver such notice to the defendant, and also a notice of the transaction received by C. So Co. from the plaintiff, and also the currency to settle the transaction. The defendant thereupon, without notice from the plaintiff, paid the gold, called for by such transaction, to C. & Co. out of gold in its possession, without being put to any expense in procuring such gold. The plaintiff, very soon after the transaction was thus consummated, learned from C. So Co. of the manner of its settlement and immediately applied to the defendant for the amount of currency paid to it by C. So Co., offering to deliver to it the $50,000 in gold. The defendant, after taking time for consideration, replied to this application, that the affairs of the bank had passed into the hands of a receiver. The defendant, after a formal demand of the gold and tender of the currency, brought this action to recover the latter. Held (1), that the advancement of the gold was substantially a loan of it by the defendant to the plaintiff; (2), that, under the circumstances, the plaintiff had not been guilty of laches; (3), that, as it was not alleged in the answer that this gold had been purchased by the defendant, or that it had been put to any expense in procuring it, the defendant was not entitled to be allowed the depreciation in the price of gold during the interval between its payment to C. So Co. and the offer by the plaintiff to repay it; as if the gold had been retained by defendant, instead of being paid out to C. So Co., the same loss, by depreciation of its value, would have been sustained by it; (4), semble that a contract to pay for the difference in the market-price of gold, in case of a depreciation between the time of the loan and its re-payment, would have been usurious, and the law will not imply, as it will not tolerate its existence.
    Appeal from a judgment rendered in the plaintiff’s favor for |94,255.29, upon tbe report of a referee.

      Wm. H. Soott, for the appellant.

      F. F. Ma/rbwy, for the respondents.
   Daniels, J.:

The principal controversy in this action arose ont of a contract made on the 23d of September, 1869, by which James Brown & Co., who were gold and exchange brokers in the city of New York, for and on behalf of the plaintiffs, agreed to sell and deliver $50,000, in gold coin, to Chase, McClure & Co., another firm of brokers, who acted in the transaction for Chapin, Bowen & Co., who were also engaged in the same business, for the sum of $70,625 in currency. By the terms of the agreement made, the gold was to be delivered and the currency received, on the following day, the twenty-fourth of September.

These three firms of brokers were at the time members of the Gold Exchange of the city of New York; by one of whose rules or regulations the contracts of its members for the sale of gold were to be settled, or cleared, by the defendant. And to enable it to do that, intelligently, notes were delivered by the vendors and vendees, respectively, addressed to the cashier of the defendant, by which he was informed that the vendors would settle, through the clearing department of the bank, on a specified day, the amount of gold agreed to be sold; and the vendees, in like form, informed him of the currency they were to pay or deliver, as the price of the gold. On each day in which the members had settlements or exchanges of this nature, to be made through the intervention of' the defendant, an account of all of them was also to be delivered to the defendant before half-past twelve o’clock in the day, and the amount of gold, or currency, as the case might require, necessary to balance all the transactions mentioned in the account, wras also to be paid, or delivered with it, to the officers of the defendant. That enabled the defendant to clear or settle all the sales and purchases reported to it, and for which the notices had previously been given, by the respective parties, to the cashier.

Without the account and the deposit of the balance, and the notices to the cashier, the defendant did not undertake to clear and settle the sales made; but with them they were settled and cleared by the defendant by half-past one o’clock in the afternoon, and the balances found due, paid to the person or persons entitled to receive them.

The 24th of September, 1869, the day on which the contract between Brown & Co. and Chase, McClure & Co. was to be by its terras performed, proved to be one of uncommon excitement among gold dealers, attended with very great and rapid fluctuations in prices, so much so that it has since been known and designated in that business as Black Friday.”

The president of the defendant, apparently distrusting its ability to settle and clear all the transactions, in gold, it probably might be called upon to balance and adjust, requested its customers, as far as they could conveniently do so, to consummate and settle their sales and purchases between themselves, without the interposition of the defendant. There was some uncertainty in the evidence concerning the existence of notice of this request, but it was of too slight a nature to leave it in any serious doubt, and the referee found it, as a fact, proved in the case. Brown & Co., the vendors of the gold on behalf of the plaintiffs, were informed of this request, and for that reason, neither delivered the notice received by them from Chase, McClure & Co. to the cashier of the defendant, nor the general statement or account of their transactions in gold which were to be cleared and settled on that day. And by reason of that omission, the defendant, by its course of dealings with its customers, the members of the Gold Exchange, was relieved from all obligations to settle and clear the sales and purchases of Brown & Co.

But Chapin, Bowen & Day, for whom Chase, McClure & Go. acted in making the purchase from Brown & Go., received the notice from them to the cashier, which Brown & Co. had delivered when the agreement was made, and delivered it to the cashier of the defendant, with an account of their transactions and the balance due, which was required to clear and settle them.

The defendant, in this way, received the $70,625 in currency, from Chapin, Bowen & Day, which Brown & Co. had contracted to receive for the $50,000 of gold coin, and without any further authority from Brown & Co. than that contained in their notice, given to Chase, McClure & Co., delivered the $50,000 in gold to Chapin, Bowen & Day, as their assignees or appointees. Neither the firm of Brown & Go., nor the plaintiffs acting through them, had any right to require the defendant to advance this gold, without placing the amount in its possession for that purpose, and had no reason to expect that it would be done by it; nor had Chapin, Bowen & Day, under the circumstances, any valid or lawful claim upon the defendant for it, but the latter voluntarily paid it from the resources placed in its hands by its customers for the clearing and settling of other contracts for the sale of gold. The aggregate of this fund was very large, and it also had a large amount of gold on hand, in what was designated as its banking, in order to distinguish it from its clearing department. Whether the amount so advanced was actually required for other clearing or settling purposes during that day, or if it were, how the clearing department was reimbursed the amount, was not clearly disclosed by the case. If it were done at all, it was probably by withdrawing that amount from the fund of the banking-department, because it was not even proposed to be shown that any loan for its reimbursement was made from any other source.

The evidence showed that Brown & Co. applied to Chase, McClure & Co. for a performance of the agreement made for the sale of the gold to them, and then ascertained that Brown & Co.’s notice to the cashier of the defendant had passed into the hands of Chapin, Bowen & Day, who had delivered it to the bank, with the currency required, and had received the gold from it. The precise time when this application was made does not clearly appear from the evidence, but it seems to have been very soon after the transaction was consummated by the defendant. Brown & Co. thereupon applied to the defendant for the currency it had received upon their contract,-as the contract-price of the gold, and offered to deliver to it the $50,000 in gold. The officer to whom the application and offer were made reserved them for a conference with the president, or a committee, and for that reason returned no definite response to Brown & Co.; and, upon returning again a few days afterward for a reply, the member of the firm acting- in its behalf was informed that nothing could be done by the committee or officers because the affairs of the bank had passed into the hands of a receiver, whose appointment appears to have been made on the twenty-ninth day of September. No want of diligence on the part of Brown & Co. appears to have attended their efforts to deliver the gold to Chase, McClure & ,Co., under the circumstances which the excitement and events of the twenty-fourth of September brought into existence, or in their application to the defendant afterward to receive the gold and deliver them the currency. The request made by the president of the bank, that its customers should clear and settle their transactions, personally, without its intervening agency, must of necessity have been productive of some delay and embarrassment to those who endeavored to conform to it. And as Brown & Co. were among that class, they, of course, had to encounter the obstacles which the exigency of the occasion placed in their way, and for that reason could not be properly considered in default for not discovering more promptly than they did, what had been done by the way of performing their contract for the sale of the gold. The defendant’s officers seem to have appreciated the existing condition of things, in their advancement of the gold, by their omission to claim any advantage from the failure of Brown & Co. to supply it before the time when that was offered to be done by them. Upon a similar view of the facts the plaintiffs, as the principals and assignees of Brown & Co., on the thirtieth of December, made a formal tender of the gold, and demanded the currency which Chapin, Bowen & Day had paid the defendant for it.

. That not being complied with this action was-brought for the recovery of the amount, on the theory that the advancement of the gold was substantially a loan of it by the defendant to Brown & Co. for the plaintiffs ; and that view was taken of the transaction by the referee, under the evidence given upon the trial.

The defendant claims this to have been an erroneous determination of the case, insisting that the gold was procured and advanced for, instead of being loaned to Brown & Co. by the defendant. But in either view it could not be distinguished from a loan of the gold as long as nothing appears in the case authorizing the presumption that the defendant advanced it and received the currency for itself and upon its own account. A difference would, however, exist in its favor if the gold had been purchased by it, or procured from some other source by which it was subjected to expense on account of .the transaction, in its conduct as agent for the plaintiffs or their brokers, Brown & Co. Upon the ratification of an act of that nature the principal would, probably, become bound to protect and fully reimburse the agent.

That the advancement of the gold was designed by the defendant to be a loan of it to the plaintiffs’ brokers, Brown & Co., seems to be entirely clear from the facts admitted by the answer, and established also by the evidence. The complaint contains the allegations that the defendant received the currency and advanced the gold to fulfill the contract made between Brown & Co. and Chase, McClure & Co., and as the agent and trustee of the plaintiffs. The answer admits the receipt of the notice of Brown & Go. to its cashier, in which it was stated that they would settle through the clearing department on the 2éth day of September, 1869, with Chase, McClure & Co., .$70,625, currency for $50,000 gold; and that in pursuance of that notice, it did on that day deliver to Chapin, Bowen & Nay, as assignees or appointees of Chase, McClure & Co., the $50,000 in gold coin, and received from them $70,625 in currency. That was a substantial concession, that what was done in conformity with the notice, was performed by the bank at the instance of and for Brown & Co. In the dealings of the bank with its customers, the notice was understood to be a request to settle and clear the transaction of which it contained a statement. But it was not obligatory upon the bank without the account of the party it was expected to act for, and the funds requisite to adjust his balances When the bank acted in these matters, it was not for itself, but for its customers, and they were required to conform to its rules and business regulations before it could be expected to do so. That, however, it was within the power of the bank to dispense with, and, under the peculiar circumstances existing at the time, it appears to have adopted that course, in the performance of the contract entered into for the sale and purchase of this gold. On the part of the purchasers, a complete compliance with the defendant’s rules was shown; and they supplied the evidence it deemed reliable of the obligation of Brown & Co. to deliver the gold. They were its customers, and to fulfill their contract, and not its own, it delivered the gold. That was paying out the gold for their customers’ use, and in every practical sense a loan of it to them. The notice operated as a request that the bank would deliver the gold for the currency, by the way of performing the agreement of Brown & Co., and it did precisely what was requested, without insisting upon what it had a right to demand, that they should first place it in possession of the.gold required to make the delivery. It was clearly a loan, and nothing more nor less than that, as the referee found and held it to be; and Brown & Oo. fully ratified the defendant’s act, in making it, by offering to refund the amount, and demanding the currency which Chapin, Bowen & Day paid for it. That was received for its customers by whom the notice or request was issued, and it was legally bound to pay it over, when its own demands arising out of the transaction were properly satisfied. Both the plaintiffs and their agents — -Brown & Oo. —when the nature of the transaction was understood, adopted the action of the defendant, and offered to deliver to it the amount of gold which had been advanced. And while it was not received, it was not refused on account of any asserted insufficiency in the amount. Gold was falling when the defendant advanced it, and the decline continued through the succeeding days in which these offers were made. And the defendant’s officers may have declined to act at first for that reason. Whether they did or not is unimportant now, for the defendant has since resisted the effort made to recover the currency substantially for that reason.

In this connection it claimed on the trial that the difference in the price should be added to the amount of gold offered, because it was compelled to procure it for the accommodation of the plaintiffs. But it was not even alleged in its answer, or in any of the interview's shown by the evidence, when payment of the currency was demanded, that it had been subjected to any expense or trouble whatsoever in obtaining the gold delivered by it.

If a demand of that nature existed in its favor, it should, at least, have been disclosed as a claim when the answer was made to the plaintiffs’ complaint. And yet nothing of that kind was alleged against either the plaintiffs or Brown & Co.; counterclaims or offsets were averred, but they in no respect embodied any demand for expenses in procuring or advances in purchasing the gold delivered to Chapin, Bowen & Day. It is not at all probable that the defendant was subjected to any such expense, or made any advances for the purchase or procurement of the gold. For it was clearly shown, and the referee found, that it was drawn from the amount held at the time by the defendant for clearing purposes. It was not even alleged that it had been replaced as a part of its clearing fund. And if it had been, it was probably done by withdrawing an equivalent amount from the gold of the bank, by way of accommodation for its customers. The interval during which the replacing of the amount may have been necessary was very brief — even if it could have been at all required — before Brown & Co. offered the gold and requested payment of the currency. In no view can it be reasonably concluded that the defendant had been subjected to any loss in the transaction, beyond that resulting from the depreciation in the price of gold; and that, it would have encountered, by continuing to hold the gold it had on hand in its banking department, if it had not used it to refund the loan made in this case. A question was asked one of the defendant’s witnesses, based upon the possible assumption that a loss had been sustained by the bank arising out of its use of gold held by it for clearing purposes. He was inquired of, whether he could state the cost to the bank of the gold which came into the clearing department on the 24th of September, 1869, so far as any portion of it was used in the settlement of contracts with any dealer in the clearing department. This question was objected to, and the answer excluded, because no claim of that nature had been alleged in the answer; and the defendant excepted to the referee’s decision on the subject. If any loss of the kind contemplated, by the inquiry had been sustained, it should have been averred to entitle the defendant to make proof of it. The Code is explicit upon this subject, and it requires a counterclaim, as this certainly was, if it had any existence whatever, to be stated in the answer, before proof can be given of it upon the trial. (Code, § 149.) The answer to the plaintiff’s complaint contained nothing from which it could by any possibility be inferred that any such claim was intended to be urged upon the trial of the cause. For that reason the referee was justified in excluding the inquiry proposed. The answer did show that the value of gold. had greatly declined between the time when the loan was made for the clearing and settling of the contract, and the day when the plaintiffs made the tender of its return. But this was a difference which the defendant could not recover. All that it was entitled to demand was the amount of gold it had advanced, with interest for the period intervening between the loan and the offer of payment-made. The law, and the course of business as it was shown upon the trial, coincided in this respect. As the market existed at the time, it was the loan of a commodity which was- the subject of speculation and trade; and the obligation implied from the transaction was, that the loan should be returned in specie, with the interest in the mean time accruing upon it. If gold had appreciated in value during the interval the advantage resulting from that circumstance would have been exclusively the defendant’s. The plaintiff could have derived no possible.beuefit from it, because the obligation was to return the same amount of gold they had received. For the same reason, the risk of depreciation rested upon the defendant. The contract implied from the transaction was, that the defendant should be returned in kind what it had advanced. And it had the power to protect itself against substantial or needless loss, from depreciation in price, by at once notifying Brown & Co. of what it had done to settle and clear their contract, and- requiring that the gold used should be immediately refunded by them. But that it did not do; apparently electing to credit them, for the time being, with the amount. It did nothing requiring payment from them. The application to refund the gold, on the contrary, was made by them when the advance made of it by the defendant was ascertained, and its indecision on the subject of receiving it, must have, increased the loss, resulting from the depreciation in the price of it. The defendant volunteered its friendly offices for the performance of the contract of Brown & Co., when it was not required by its own rules and regulations to act at all, simply by way of accommodating its customers, and all it could require, in return for what- it did, was repayment for the gold paid out as soon as that could be reasonably made by the involuntary borrowers, and that was offered by them with a degree of promptness that excluded the imputation of neglect or failure upon their part. A contract to pay for the difference in the market-price of gold, in case of a depreciation between the loan and the time of payment, would have been usurious, and the law will not imply, as it would not tolerate its existence. The defendant’s claim for it was properly rejected by the referee. The defendant was not bound to advance it at all. It had the right, and such was its course of dealing, to decline to act in the transaction unless Brown & Go. first placed the gold in its hands which was required for clearing the contract. It did not do that,- but, without being obliged to do so, advanced the gold for them to perform their agreement, apparently relying upon their subsequent payment of the advance made. It gave Brown & Go. a credit by doing so, which they made timely proposals to satisfy, but which the-.defendant, by its conduct, declined to accept. Its answer concedes that it acted alone for them, and upon their offer to return the gold, as long as nothing further was demanded at the time, by way of interest, they were entitled to the currency which the defendant had received for them in the course of the performance of their contract. If their offers were in any respect defective the defects were obviated by the formal tender of the plaintiffs on the thirtieth of December, when the refusal to deliver the currency was placed on the sole ground that a receiver had been appointed of the effects of the bank; and after that the refusal was not justified because the offers or tender of the gold were defective, but because of claims made by it against Brown ,& Go., exceeding the amount of the currency, and arising out of other transactions. One of these was a contract to purchase $105,000 in gold for $151,500 in currency by Brown & Co. from Dakin & Gillespy, for which the notice of Brown & Go. to the cashier was delivered to the defendant; and it claimed to have advanced the currency required to complete the purchase, and for that to have a claim against Brown & Co. which’ should be allowed them in this action. But the evidence established the fact so clearly, that this contract was not settled or. 'cleared through the agency of the defendant, that it was abandoned and withdrawn during the progress of the trial.

Another, and the only other alleged, was for money advanced in settling and clearing a purchase of $20,000 of gold from B. W. Martin & Co. for $28,625 in currency. The defendant averred that it had advanced the currency to clear and settle this purchase. But the evidence given to prove the fact, upon its part, was exceedingly infirm and unsatisfactory, while on the part of the plaintiffs, it was shown that the president of the bank had given notice of his desire that parties having contracts to clear and settle on the 24th of September, -1869, should do the business themselves, as much as they could, without the defendants’ agency; and that this contract was settled and cleared by the parties to it outside the bank. The evidence was quite satisfactory that this particular transaction was stricken from the general statement or account of Martin & Co., by an officer of the bank, for the reason that Brown & Co. had omitted to send in the notice or ticket addressed to the cashier and received by them; or an account of their contracts which required clearing, or the funds needed for that purpose; and that it was settled between the parties personally.- Direct and positive evidence was given in support of these facts, and that the defendant had no agency, and advanced no money, in the adjustment of this agreement. The preponderance was very decidedly with the plaintiffs, and the referee found in their favor upon it. The notice of Brown & Co., delivered to Martin & Co., that they would settle the transaction through the bank, was delivered to it, and remained in its possession. But, beyond receiving and retaining that, it was shown, with reasonable clearness, that it had nothing whatever to do with the receipt of the gold or the payment of the currency for it. That was settled between Brown & Co. and Martin & Co., without any agency or participation on the part of the defendant, and it consequently had no claim arising out of that transaction. The referee’s decision upon that subject must be accepted as controlling. The only grounds upon which the plaintiffs’ demand for the currency, received by the defendant for the $50,000 advanced by it, has been resisted, are its asserted right to indemnity for the depreciation in the market-price of gold, and the counter-claims already considered. Upon the latter, as it advanced nothing, it can be allowed nothing. Its defenses have been pressed with great ability and ingenuity, but the facts are found to be wanting on which they have been presented. As no reason exists for interfering with the judgment, it should be affirmed.

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

Judgment affirmed.


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    CHARLES P. WARNER, Respondent, v. THE PENNSYLVANIA RAILROAD COMPANY, Appellant.

      Removal of cause into United States courts — chap. 187 of 1875 (United States statutes).

    Under the provisions of tie act of Congress (chap. 187 of 1875) providing for the removal of causes into the United States courts, “ before or at the term at which said cause could be first tried, and before the trial thereof,” it is too late to make such application after the cause has been noticed for trial, and placed upon the calendar of the court at a term at which it could be tried, even though it may not have been reached, and even if the trial thereof has been stayed by order, pending the execution and return of a commission.
    Semble, that, under the aforesaid act, it is not necessary that either of the parties should be a citizen of this State to render the cause a proper one for removal.
    Appeal from au order denying a motion made for tbe removal of this cause into tbe Circuit Court of tbe Hnited States.

      Charles F. Sanford, for tbe appellant.

      D. McMahon, for tbe respondent.
   Daniels, J.:

Tbe application for tbe removal of tbe cause was made under chapter 137 of tbe Laws of tbe Hnited States, enacted in 1875, which made important changes in tbe practice previously existing on this subject. Tbe act was not an amendment of tbe preceding law, but a new enactment, repealing all others inconsistent with the provisions made. And by its terms, a positive right has been given to each party to an action, when they are citizens of different States and the matter in dispute exceeds $500, to apply for and secure its removal into tbe Circuit Court of the Hnited States for tbe proper district, without any other restrictions as to time or the condition of the action than that tbe application must be made before or at the term at which said cause could be first tried, and before the trial thereof.” (Laws of Forty-third Congress,.470, 471, §§ 2, 3.) The affidavit used to oppose the application was exceedingly defective in its description of the condition of the action, previous to the service of the petition for its removal. It merely showed that after receiving an admission of service of the summons, with notice of appearanee and demand of a copy of the complaint from the defendant’s attorneys, issues were joined and the cause put upon the calendar of-the Circuit for trial. The statement in the' petition is more definite in this respect. That stated that the suit “could not have hitherto been tried at any term of this court for the reason, that the same has never yet been reached in its order on the trial calendar, and for the further reason, that the trial thereof has been stayed by order pending the execution and return of a commission.” This very clearly supports the inference that the action-had been noticed for trial, and placed upon the calendar after the act took effect and before the petition was made or presented; and when that was' done it was the calendar of the Circuit which was evidently referred to, because, regularly, as an action at law at issue on a question of fact, it could go no where else. That was, consequently, a term at which the cause could be tried, which is all the law requires to terminate the right to apply for a removal of the action. The circumstances mentioned in the petition, that it could not be tried because it had not been reached in its order, and an order had been made staying the trial until a commission should be returned, do not change the condition of the case. The term on whose calendar the cause was placed was, nevertheless, one at which it could have been, even though it was not, called for trial. By an unusual acceleration of the business of the Circuit that is not at all unfrequent, and by a return of the commission during the term, the cause might- have been tried. That it was not does not change the construction which should be placed upon the language of the statute. It went into effect early in March, 1875, and the petition was neither presented nor filed before the twelfth of the following month of May. In the regular course of business the action'could have been noticed for trial for the April Circuit, and that court could have tried the case. The fact that it did not, will not justify the conclusion that it could not. have done it. And the same was true as to the Circuit held in May. It might have been noticed for either or both of these courts, and either was a competent court to try it, and was held long enough after the act. of Congress went into effect to afford the parties an opportunity to notice and place the cause upon its calendar, or notice and make the motion for its removal.

The statute not only requires that the application shall be made before or at the court in which the cause could be tried, but it in terms restricts the right to make it to the first of such courts; and as this cause was pending, and from the petition and affidavits may be inferred to have been at issue, when the act of Congress went into effect, the court -first afterward held, for which it could have been noticed and at which it could have been tried, was the latest court at which the application for its removal into the Circuit Court of the United States could properly be made. Any other construction than that requiring the application to be made before or at the first court having authority to try the cause after issue has been joined, or in cases pending and at issue when the law went into effect, at the first court afterward held for which it could be noticed, would allow the applicant to delay it until all the preparation of his adversary had been made for trial, and the trial itself should be about to be commenced, and in that manner subject him to a compulsory postponement, which might involve him in the inability to afterward establish a meritorious cause of action or defense. And even when that should not be the result, a degree of loss and embarrassment would be occasioned which it could not have been the intention of Congress should be permitted, and which no just construction of the terms used in the law would justify courts in imposing upon either party.

The proceeding is entirely statutory, and the party claiming its benefit should be required to present a case within the reasonable import of the terms of the law, to entitle him to an order for the removal of the cause. He should show by the papers presented in his behalf that the application is made in time. If he does not the case cannot be seen to be within the statute and the necessary consequence will be, that the application must be denied. That was not done in this instance. The petition of the defendant did not show that the court which wras applied to for the order was held before the first court at which the action could have been tried after the act of Congress took effect; and as a ■ matter of fact it is clear that it was not, because a court was held in April, and another in May, at which the action could have been tried, even though it might not have, in fact, been called for that purpose at either of such terms.

It was claimed that no removal could be directed, because neither party was a citizen of this State. That was required by the law previously in existence, but, under the present act that fact is no longer necessary to render the cause a proper one for removal into the United States Circuit Court. All that is now required in that respect is, that the action shall be a controversy between citizens of different States. It is not, however, necessary now to consider the effect of this or any of the other changes made by the present act, and not involved in the disposition of the present appeal, for the purpose of deciding this case.

It is sufficient that the application was made after the time prescribed by law.

The order should be affirmed with the usual costs.

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

Order affirmed, with costs.


text:
    LEOPOLD LINDON, Respondent, v. ORIN M. BEACH, Impleaded, etc., Appellant.

      Frivolous answer— order striking out — appeal from.

    An order striking out an answer affects a substantial right, and is appealable to the General Term and Court of Appeals. (Western Railroad Corporation v. Kortiight, 10 How., 457.)
    In an action against the acceptor of a bill of exchange, he alleged that he accepted the bill at the drawer’s request, and on his agreement to deposit notes with him to secure him against liability, which agreement was never complied with, and that the plaintiff received the bill with notice of these facts, and without giving any consideration therefor. Reid, that the answer could not be stricken out as frivolous.
    Appeal from an order striking out defendant’s answer as frivolous.

      Sidney Williams, for the appellant.

      H. O. SoutJmorth, for the respondent.
   Daniels, J.:

Tlie order striking out the answer was entered in a very brief form on the 20th of March, 1875, and on the first of April following another order was entered containing a description of the motion made, the papers used upon the hearing, and the decision made by the court. The notice of appeal stated the appeal to be from the first order, which the respondent insists is not effectual for the purpose of reviewing the decision. But as the order entered on the first of April was no more than an amplification or amendment supplying formal defects in the one which was entered upon the decision made, there can be no substantial ground for this objection. The object of the notice was to appeal from the decision which struck out the answer. And it sufficiently apprised the respondent'of that fact, to render it entirely effectual. He was in no manner misled by the defect, if any such in truth existed, and for that reason this objection should be disregarded according to the provision made by section 176 of the Code.

The next objection taken to the appeal is, that it should have been from the judgment ordered in the plaintiff’s favor instead of from the order striking out the answer. But the case does not show that any judgment was, in fact, entered upon the decision. If judgment had been entered the respondent’s remedy was a motion upon affidavit, showing that fact, to dismiss the appeal. The mere fact, that judgment was ordered for the plaintiff, was not sufficient to prevent an appeal from the order, as long as the judgment was not entered.

The order made affected a substantial right of the defendant, and involved the merits of the action ; and, by subsection 3 of section 349 of the Code, it was expressly made appealable. This was distinctly held in the case of Western Railroad Corporation v. Kortright (10 How., 457). Authorities of an adverse character are to be found on this subject in the books. But they seem to be -in plain conflict with the provisions of the statute in this respect. For that expressly provides that an appeal in those cases may be taken to the Court of Appeals from an order which strikes out an answer, or any part of an answer, or any pleading in an action ” (Code § 11, sub. 2), which clearly would be practically annulled, by holding that the appeal in such a case could only be taken from the judgment. The party affected by the order is not bound to wait for the entry of a judgment. He may appeal from the order at once to the General Term, and afterward, in a case like the present one, to the Court of Appeals, if the decision of that court should be against him.

The defendant appealing was acceptor of a bill of exchange drawn upon him by A. Wackerhagen. By his answer, it was alleged that the acceptance was made at the drawer’s request, and on his agreement that he would, the next day, deliver to him the promissory notes of two persons named in the answer, for an amount about equal to the acceptance, to secure him against liability upon the same. That he afterward failed to deliver the notes, and the plaintiff received the bill from him without giving any consideration for it, and with notice of all the equities existing between the defendant and the drawer. The answer was sworn to by the defendant. And if the statement contained in it should prove to be true, it would not be so clear that it contained no defense, as to be liable to be stricken out as frivolous. (Book staver v. Glenny, 3 N. Y. S. C. [T. & C.], 248.) This case is directly in point, and the principle decided has been since affirmed by the Court of Appeals in Bookstcwer v. Jayne, not yet reported.

The affidavit of the plaintiff, used in support of the motion, stated that he received the bill in satisfaction of a claim which he had against the drawer for converting certain bonds. But that was a precedent liability, and he surrendered nothing held by him for it, either when the bill was delivered or at any time afterward, and could not, consequently, protect himself as a bona fide holder of it for value. (Lawrence v. Clark, 36 N. Y., 128 ; Pratt v. Coman, 37 id., 440; Barnard v. Campbell, 58 id., 73.) He also denied notice of the agreement, set forth in the answer, that the drawer would, the next day, deliver notes to secure the acceptor against liability. But the defendant’s affidavit was equally as positive that thé acceptance was made on the condition that it was agreed that such notes were to be given him, and he stated that the plaintiff was present when the agreement was made, and understood that the defendant was not to pay the bill, if the notes were not delivered to him. He also added, that the plaintiff had admitted the same thing since the bill became due.

These affidavits showed the existence of a sharply contested issue of fact between the parties, which could not properly be tried upon a motion. Who was right it was not practical to determine upon the papers produced. In such a contest the parties are entitled to have the issue between them tried in the ordinary manner. It was substantial, and doubtful in its nature, requiring an oral examination of the parties, and the observance of their conduct and probable truthfulness, for its proper determination. The answer may have been false, but that could not be satisfactorily concluded from the affidavits produced.

The order appealed from should be reversed, with ten dollars costs and disbursements attending the appeal, and an order entered denying the plaintiff’s motion, with ten dollars costs.

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

Ordered accordingly.