author: Ingalls, P. J,:

text:
    In the Matter of the Last will and Testament of JAMES FOSTER, Deceased, etc., and the Petition, of MARY E. WHITTELSEY.

      •Liability of trustees — fir improper investments turned over of his successor — when proceedings by petition allowed.

    Where the resignation of a trustee is .accepted and his bond discharged, .upon his transferring the trust estate to his successor, such estate consisting-of money or of such securities as the law authorises, he is exempt from all liabilities for any loss which subsequently occurs,to the,fund. ;
    Where a trustee has invested the estate in, and transfers to his s.ucpessor securities which the law.does not recognize as .valid investments — e. g., promissory .notes —he continues to be responsible for the security of such investments until they ■ become converted into money or legally invested; but, where. one„of the notes so transferred is subsequently paid by the maker, the .former trustee ,-is relieved from all liability therefor, although the amount of such note may nev-er be received by the trust estate.
    After a trustee had been discharged, his bond canceled, and the trust funds transferred, to • his successor, a petition was filed by. the cestui que trust to,set .aside his discharge and compel, him to. pay over the .amount of certain of,tbe . securities so transferred, on the ground that they were,,improper investments, and had subsequently proved to be worthless; held, that by appearing ápd proceeding to an investigation upon the merits, without taking the objection that an action and not a petition was the .proper remedy for the cestui, que tipcst, the . objection was waived, and .could .not be first raised rxpon an .appeal.
    The power of a court of equity to proceed by petition, instead of action,.considered;

      Appeal by .Antoinette E. Hoguet, executrix, etc,, of Anthony L. Hoguet, deceased, from an order entered in the county of New York confirming the report Of Thomas H. Rodman, Esq., referee. This proceeding- was founded upon a petition made by Mary E. Whittlesey to vacate an order discharging one Anthony L. Hoguet, a former trustee of the petitioner, and the sureties upon his bond, and to compel him to make good certain of the securities 'transferred to his successor, which were alleged to have been improper investments for a -trustee to make, and which had proved worthless and uncollectablc. The referee appointed in the proceeding found, among otherthings, that Anthony L. Hoguet, in February, 1856, in conjunction rvith one Getty, as trustees under the will of James Foster, Jr., received the sum of $30,000 in cash, and that the care and management thereof by arrangemeut between them devolved upon said Hoguet; that in June, 1856, ho deposited the whole sum to his credit, as trustee, 1 with the firm of Lahens & Co., commission merchants, of the city of New York, with whom his then firm of Hoguet & Boell had dealings, and to which firm of Lahens & Co. his firm was then indebted between $30,000 and $40,000, being a balance of account between the two firms. At that time Louis E. Lahens, the senior partner of Lahens & Co., was in Europe. He had left his busi- ' ness in- charge of his two clerks. On his return, he repudiated the act of his clerks, who had received in • his absence the money from Hoguet, in accepting it as a special deposit of a trust fund, and credited the firm of Hoguet & Boell with the amount in their account. This gave rise to a controversy, Hoguet demanding the fund and Lahens refusing to pay it over; and proceedings were commenced to remove Anthony L. Hoguet as trustee, and to compel him to make good and pay over the fund of $30,000, which it was alleged had been lost or misappropriated by him. Lahens and Henry Hoguet, a brother of Anthony L. Hoguet, were the sureties on the bond given by the latter for the faithful performance of his duty as trustee. Lahens & Co. were then, and for several years afterwards, solvent and responsible, though they subsequently became and are totally insolvent. Instead of enforcing his demand, Hoguet entered into the following arrangement: He agreed to resign his trust, and that Edme J. Genet, an attorney -and counsellor at law, of the city of New York, should be appointed in his place, aud he agreed with Lahens, that he, Lahens, should give -his' promissory note for $15,000, in conjunction-with one John La Farge, payable in one year, to Getty’s order as trustee, that being one-half of the principal of the funds, and the said Henry Hoguet should give Getty two bonds and mortgages, each for $5,000, and the promissary note of Henry Hoguet for $5,000, •that being the amount of the balance of the principal of said trust .fund, and to pay to said Getty, as trustee, some $223.34 cash as accrued interest on the trust fund. It was further arranged between these parties, that the proceedings instituted for the removal of Anthony L. Hoguet should be discontinued, and that he be allowed to petition to resign his trust. This agreement was ■carried into effect, and subsequently a report ivas made by a referee that Edme J. Genet was a proper trustee to be appointed in place of Hoguet, and he had accordingly appointed him; and had taken the bond of John La Farge and L. E. Lahens as his sureties; that it had been proved to him that Anthony L. Hoguet had paid over to the said Getty, his co-trustee, the said principal of $30,000, and $226.43 balance of income. March 6, 1858, such report was confirmed, and Hoguet ordered to be discharged. In fact, the only money paid was $226.43, and the only securities delivered were those above mentioned. The petitioner testified that she had no knowledge of this transaction, and never assented to it. La Farge was abundantly responsible when ho gave the note of $15,000, and so continued until his death, which occurred before the note matured. After his death, and after Lahens had failed, a suit having been brought upon it by Getty, as trustee, against La Fargo’s executors, it was- defended on the ground that the note being a joint, obligation, their testator’s liability ceased at his death. The Court of Appeals sustained the defense, and the debt is-apparently worthless. (Getty v. JBinsse, 49 N. Y., 385:)'. The promissory note of Henry Hoguet for $5,000 was paid, bub not to the trustees. 1
    The referee also found as follows : “ that Mary Whittelsey, the cestui que trust, has derived no income from the said $20,000 of said trust fund since May 1st, 1867, and in my opinion the said Anthony L. Hoguet in his life-time was liable, and that after his death his estate or his sureties are liable for said $20,000, -and tho-•interest thereon from May 1st, 1867, with annual rests.”
    From au order confirming the report -of the referee-this-appeal was taken.

      Joshua M. Van-• Gotti for the appellant,
    -Antoinette E. Iloguet, executrix. This cohrt, whether as a court-of- law-or equity (and po more as a .court of equity than as a - court of law), has' not jurisdiction to proceed- summarily, by motion or petition; to adjudge a. pecuniary liability against- the personal' representative of a'discharged and deceased trustee- for a devastavit alleged to have been committed by him; In inspect to infants,: limatics,• and in a few-other cases (not-including-such-trusts .or confidences in personal property as the- present, -which is a mero personal fund), it was; by force- of ancient- usage or by statute,exorcised" summarily on petition. (Ex purte Salter, - 3 Bro. C. C.y 500 ; Williamsbn v. Berry, 8 How. [U. S;], 552-557; 561; • Teal v. Woodworth, 3 Paige, 475;- Bx’rs of Brdsher v. Van Oort-I’andl, 2 Johns. Ch.,-245, 401; In-re Bostioiek, ■ 4-. Johns. Ch. It., 100; O’Donnell A Brady’s Dig*- Irish Equity .Cases, 196;-In re Fitzgerald,- 2 Sc-ho. & Lefr.y 438.)- With-these-special exceptions,-it has become a settled principle that- the court could proceed oiily'by plenary process — that is. to say, by bill or informa-lion and subpoena. {In re VanWych, 1 Barb. Ch. R., 563'; In i-e Livingston, 34 N. Y.,'568, 569 ;■• Qu’ackenhoss v. Southwiclc,41 id., 120, 121; Lóggetf’v. Hunter,T 9; id., ■445-, 459 ; Wollard’sTrust, 18 Jur., 1013.) It is only in cases cohiing strictly within the Statutes that the British courts claim power to proceed otherwise' than by action. {Ex parte Brovin, Geo'. Cooper’s- E.,- 299 ;■ Eti' parte Skinner, 2 Morivalo, 457, side paging; Oorporationof Ltufc low v. Greenhouse, 1 Bli. P. C. [N. S.], 64,- 93 ; this caso- is very instructive';' In re Buckley's Trust, 17 Bcavan, 113.')' The- cases-Cited in Hill oivTrustoes, supra, arising-under post Revolutionary statutes, such as Sir Samuel Romilly’s Charities Act (52 Geo. Ill,Ch; lól) ; the Irish Encumbered Estates Act (12th- and 13th Viet; Ch.,-77); The'Trustees’ Acts (1 Wm. IVtli Ch.,-10); 10th alid 11th Viet. Ch., 96,- and 13th Viet. Ch.y 60);. the- Settled-Estates'Acts (19th and 20th Vict.y 120, and 21st' and 22d Vict;y 77), show, that whether or not a ease can be instituted , by petition isa jurisdictional question. (See, further, Trustees’ Relief Acts, Allen’s Will, Kay’s R., Appendix, 51; Cazneau’s Legacy, 2 Kay & Jo s.„ 249; In. re Hodge's Settlement,. & id., 216 ; Thorpe., v. The e, 1 id., 439; in. re Hazard's. Trust, 24 Law Jour. |N. S„. Ch' eery], 441; In re Draper's Settlement, 9 Weekly Rep., 805 ; In ¿ Fitzgerald, 2 Scho. & Lefr., 441.)
    : Charles M. Dayton and Albert Cardozo, for the respondent,
    Mary 3. Whittlesey. The petitioner had the right to bring the -matter before the court by petition. {Mechanics' Bank, 2 Barb. S. C.., 446; Horton's Case, 9 N. Y., 176 ; In the Matter of Livingston, 34 id., 582; 2 R. S., 107, § 27 ; Laws 1847, chap. 280, §,8 ; Le Guer,v. Gouvemeur, 1 Johns. Ca., 436-499 ; Forest v. Forest, 25 N. Y.t 501; Leggatv. Hunter, 19 id., 459.) The Court of. Chancery,had the right, and it was its practice, when even part of a claim was admitted to .be due, to order that part paid, and to. enforce it by. decree or otherwise. (Courson v. Hamlin, 2 Duer, 513 ; Clark-son v. De Peyster, Hopk., 274 ; Mills v. Hansen, 8 Vesey, 68 ; 1 Barb. Ch. P., 237 ; 3 Daniels Ch. P., 467 ; Brockway v. Copp, 2 Paige Ch. R., 578-)
   Ingalls, P. J,:

It is insisted by the counsel for the appellant, that & petition, was so far an inappropriate, remedy, that even jurisdiction was., not acquired by the court? and the, proceedings should, therefore, be dismissed, and. the party required to seek relief by action, Notwithstanding the able argument submitted by the learned counsel for the. appellant, we are not convinced that the proceeding, is fatally defective. The parties appeared and investigated the merits without raising this question until an appeal was taken; under such circumstances the objection should not be. regarded with favor. If the court acquired jurisdiction of the person it is ■sufficient, as there can be ,no reasonable doubt but that it possessed jurisdiction of the subject-matter. If the party against whom the proceeding was instituted had deemed an action necessary, or that other pai-ties should be represented, he. shoiild have, .promptly applied to, the, court for such relief; and. having omitted, :to do so, nothing short of an inexorable rulo requiring it should induce the court to dismiss the proceeding after so much time has been occupied and money expended iu this controversy. The subject-matter of this investigation is a trust created by will, and in regard to which a court of equity possesses jurisdiction. (Gott v. Cook, 7 Paige Chy., 521; Kane v. Gott, 24 Wend., 641.

Any party who is interested in the trust may apply to the court for relief in regard to the fund or the management thereof by the trustee. Such application may be made iu any form, which the law sanctions. In matters of equitable cognizance, proceeding by petition is as old as jurisprudence, and has beeii favored rather than discouraged by the courts. It is difficult, if not absolutely impossible, to indicate an unvarying rule by which to determine in equity cases when an action is indispensable, avo think it must mainly be left to the sound discretion of the court to be exercised in view of the circumstances of the particular case. In this case Ave perceive no practical difficulty in determining the questions involved, and settling the rights of the parties without abandoning this proceeding and incurring the delay and expense of an action.. The real question to be settled was Avhethcr Anthony L. Hoguet had so far violated his duty, in regard to the proper investment of the fund, as to render him liable for the loss which had occurred. It does not folloiv that his estate is to be excused, because the other trustees may have become liable in consequence of failure to discharge their duty in respect to this' trust; nor is it indispensable that their liability be determined iu this proceeding. We conclude that this objection should not prevail. (2 Barb. Chy. Prac. [revised], 579; 2 Harrs. Chy., 25; Godwise v. Gelston, 10 Johns., 507, 521; Quackenboss v. Southwick, 41 N. Y., 117; In the Matter of the Mechanics' Bank, 2 Barb., 446; In the Matter of the Petition of Livingston, 34 N. Y., 555; The People ex rel. Jennys v. Brennan, 3 Hun, 666; People v. Norton, 9 N. Y., 176; Sheldon v. Fortescue, 3 Wills., 104; Fisher v. Hepburn, 48 N. Y., 41.)

The appellant further contends that, upon the merits, the re- ‘ port of the referee should not have been confirmed by the Special Term. James Foster, Jr., died in the year 1854, leaving a last ' will and testament, by AArhioh he gave in trust to Gabriel Mead and William A. Carter $30,000, the income of which he directed paid to his daughter, Mary E. Foster, now Mary E. Whittelsey, during her natural life, and the principal to be paid, at her decease, to hrr lawful issue, and in cuse she left none, to other parties specified in such will. The said Mead and' Carter refused, to execute the trust and were discharged, and Anthony L. Iloguet and Andrew C. Getty were appointed- trustees by the court in January, 1856. Iloguet received the '$30,000 -in cash, and .assumed the exclusive care and control’ thereof. The- facts established upon the hearing, and which were-fully- discussed by the referee, show a disregard of the rule prescribed- by the courts in regard to the investment - of crust funds. -If-a trustee departs from such rule, he does so at his peril, and becomes personally-responsible for any loss occasioned thereby. In this case Hoguet received the fund in money, and therefore was not embarrassed by any previous investment, or by any express direction in the will in regard thereto. His duty was clear, and the departure ■therefrom voluntary. (King v. Talbot, 40 N. Y., 76; Ackerman v. Emott, 4 Barb., 626; 2 Story’s Eq. Jur., 640, § 1275.) If Hoguet had passed over to 1ns successors, money or such securities as the law required, ho could properly claim exemption from liability for any loss which subsequently occurred to the fund. But having delivered such securities as the law did not recognize as a valid investment, he continued responsible for the security of the fund until it became legally invested or converted into money. It is not the duty of the court to speculate in regard to what the result would probably have been, if the investments had been such as the law required. The party interested in the fund was not required to investigate all the transactions in regard to ifs management, with a view to establish which of the trustees had been most in fault. The formal discharge of Anthony L. Hoguet should not have the effect, under the circumstances, to shield him or his estate from liability. It appears that Mary E. Whittelsey, the cestui que trust, was not informed in regard to the manner the fund was managed by Anthony L. Hoguet, and she should not be chargeable with the knowledge which the attorney Genet possessed in regard to the matter. ■ (Mandeville v. Reynolds, 68 N. Y., 529, 540.) Especially so as she is only entitled to the income of the fund during her natural life. We .conclude that the- decision of the- referee was correct m regard to the portion of 'the fund included in the mortgages and the note of $15,000. In.reference to the note of .Henry Hoguet for.$5,000, the referee finds that it was delivered with the other securities to Getty, the trustee, and that it was subsequently paid by the maker. Wo-are of opinion that the delivery of such note to Getty under the order- of the -court, coupled with the- actual payment thereof, had-the effect to free Anthony L. Hoguet from all liability for the portion of the -fund embraced in such note. The subsequent diversion of the iiote • by Getty, or his associate trustee Genet; sliould: not have- the effect to charge Anthony L. Hoguet any more than, if ho had paid over the money, and the same had been lost in consequence-of the negligence or misconduct of such trustees. By the payment of the note, the fund, to that extent, became converted into money. It is immaterial to whom such payment was made, as -it appears to have boon made after the delivery of the note to Getty, and without'.any connivance on the part of Anthony L. Hoguet. The omission to invest trust- funds in the manner required: by law charges the trustee, only in case the security which, lie-does take fails to produce the money. In this case no such result followed, as the note was paid. We faff to, perceive upon what ground Anthony L.. Hoguet or his estate could be- made liable for that portion of the fund. The rule adopted by the courts in regard to the investment of trust funds is unquesti.onably-sound', and calculated to produce salutary results; but the doctrine should not be carried so far as to do positive-injustice to a trustee in a case where it appears that such omission of duty- has not contributed to the injury complained of. Wc are satisfied that as to the portion of the fund which was, embraced in said note of Henry Hoguet, the referee erred in holding the estate' of Anthony L. Hoguet liable, and that his report, to that extent, should not have been confirmed. The, order of the-Special Term should-be modified by affirming it in' all respects, except, in regard to the portion cf the fund embraced in the- note of. Henry Hoguet, as to that it should be reversed. Neither' party should have costs of this appeal, as neither wholly prevail.

Potter, J., concurred.

Present— Ingalls; .P. J., .and PotteRv J.

0rder modified as-directed in the - opinion,, without.- costa, to either party.


source: Caselaw Access Project

author: Ingalls, P. J.:

license: Public Domain

text:
    CLARK B. AUGUSTINE, Plaintiff, v. JAMES BRITT, Defendant.

      When a deed does not convey the fee of a street, infront of the lot' eonveyed.

    A’deed conveyéd certain lots in New York, referring tó'a' map filed in the register’s office and giving their numbers thereon, and described them as “beginning atá point formed'by. the intersection - of the-westerly side of the Bloomingdale road with the northerly side of Ninety-Sixth street, and running thence * * * thence easterly, along said southerly side of Ninety-seventh street, eighty-seven feet eight and one-quarter inches to the westerly side of Bloomingdale road, and thence southerly, along said westerly side of the Bloomingdale road, two hundred-and three feet and six inches, to the point of-beginning; together with the right, title, and interest of the said parties of the first part” to the-strips laid out on the'-map as-public streets and called'Ninety-sixth and Ninety-seventh streets.

      •Held, that the light and title of -the parties of the first p.art-to the fee of that portion of the-Bloomingdale road lying in-front of the premises conveyed; did not pass by the deed, but remained in the-grantors and could'be subse(piéritly conveyed by'them'.
    Controversy submitted on agreed-fact's Tinder section 1279 of the Code of Civil Procedure. The plaintiff sues to compel the specific performance of a- contract by the- defendant to purchase a: parcel of land, which was: resisted' by' the defendant on- the ground that the -title was-defective: ■' The land iii question ivas at' one time embraced within the- boundaries, of the' Bloomingdale road; New York ; which road was afterwards-abandoned......

      James A, Deering,. for the plaintiff.-
    The- description in the: 'deed from Gott'eto Sands did not include- or convey' any part-of. the-road-bed. (Jackson v. Hathaway, IN Johns:, 449;.. Jones v.
      Cowman, 2 Sand., 233; Wetmore v. Law, 34 Barb., -515; Van Amringev. Barnett, 8 Bosw., 367; Anderson v. James, 4 Robt., 35; Coster v. Peters, 5 Robt., 192; Shermanv. McKacn,33 N, Y., 266; Wallace v. Fee, 50 N. Y., 694; Fearing v. Irwin, 4 Daly, 385;' English v. Brennan, 60 N. Y., 609; White's Bankv. Fiicholls, 64 N. Y., 65; Mott v. Mott, 68 N. Y., 246; Patten v. FT. Y. E. R. R., 3 Abb. [N. C.,] 341.)

      Edward Devoe, for the defendant.
    Nothing short of a reservation in express terms will serve to limit the land to the side of a street, if actually bounded upon or touching such street. (Canal Commissioners v. People, 5 Wend., 423; Luce v. Carley, 24 ~W., 452; Child v. Starr, 4 Hill, 378; Bissellv. FT. Y. C. R. R. Co., 23 N. Y., 61; Perrin v. FT. Y. C. R. R. Co., 36 N. Y., 120; Miner y. Mayor, 5 Jones and Spencer, 200; 8- Cush., 598; 2 Smith’s ■Lead. Cas., 228; Paul v. Carver, 26 Penn., 224; While v. Godfrey, 97 Mass., 472; Woodman v. Spencer, Am. Law Register, Yol. 14 [N. S.j, 411.)
   Ingalls, P. J.:

The parties hereto have entered into a mitten agreement, by which the plaintiff has covenanted to convey to the defendant the land in question, and to vest in him a perfect title thereto. The defendant has agreed to accept such conveyance and to pay for the laud, but refuses to receive the title which the plaintiff offers, on the ground that it is imperfect and not in accordance with the agreement. As early as the year 1726 the land in question constituted a part of the farm of Teunis Ides. At about that period a public highway, known as the Bloomingdale road, was laid out through such farm, and was used by the public as such until it became abandoned through the agency of the Commissioners of the Central Park, acting- under chapter 697 of the Laws of 1867. The land in question was embraced within such public highway, and used by the public up to such abandonment. The public possessed in such land a mere easement, which terminated when the highway was abandoned. The title to the land remained in the original proprietor, subject only to such easement, and is now vested in the party who can trace his title back to said Teuuis Ides. After an examination of the facts, without stopping to note here the links in the chain of title, we are satisfied that James Strieker was, at the time of his death, which occurred in December, 1831, the owner of such farm, including the road in question. By his will he devised the same to his widow for life, and at her decease to his children, naming them. In or about the year 1853, an action of partition was commenced and prosecuted to a decree, under which the land was sold by Hon. Philo T. Buggies, as referee, a portion of which was purchased by George H. Peck, and the residue by John B. Cotte, and the referee conveyed the land accordingly to the purchasers. In the year 1859 George II. Peck conveyed to said John B. Cotte, who, by virtue of such conveyances, seems to have acquired title to a portion of the farm, including the land in question, subject only to the easement possessed by the public. On the 1st of March, 1860, John B. Cotte and wife conveyed to Bichard Sands a portion of such laud, which is described as follows : “All those certain eight lots, pieces or parcels of land known on a map filed in the office of the register in the city and county of Now York, on the 24th day of June, 1856, and numbered five hundred and eighty, and entitled ‘ Map of land in the Twelfth ward of the city of New York, commonly known as the Striker’s Bay Farm,’ sold by an order of the Supreme Court, under the direction of Philo T. Buggies, referee, surveyed by John J. Sorrell, city surveyor, dated New York, December, 1855, by the number's from two hundred and fifty-one (251) to two hundred and fifty-eight (258), both inclusive, and which said lots, taken together, are boujided and described as follows: Beginning at a point formed by the intersection of the westerly side of the Bloomingdale road with the northerly side of Ninety-sixth street, and running thence westerly along the said northerly side of Ninety-sixth street eighty-six feet and eight inches ; thence northerly, and parallel with the Eleventh avenue, one hundred feet and eleven inches to the centre line of the block; thence easterly along the centre lino of the block twenty-five feet; thence northerly and pai’allel with the Eleventh avenue one hundred feet and eleven inches to the southerly side of Ninety-seventh street; thence easterly along said southerly side of Ninety-seventh street eighty-seven- feet eight and ©ne-quarter inches - to. the. westerly, side of Bloomingdale-- road, ■ and thence southerly-, along■ said westerly side of the.Bloomingdale roa,d . two hundred arid three feet and six-¿inches to t/iegooint of beginning-.; ' together with the .right, title, and interest of the said parties ; of the first part in orto such parts of ’the -strips of land plaid out on the .said map as public streets,- called Ninety-sixth- and Ninetyrse.v* •.enth streets, as lies in front .of.-or adjoining the said-lots-hereby .-granted and conveyed,-and. extending- to the middle,of the.s.aid street.”

On the 19th day- of March,: 1878, John B. Cotte and wife conveyed the parcel,of land in controversy to William. J, Bell, who, on the 25th day of-March, 1878; conveyed the game to the plain- , tiff. If we-, rightly coinprchend--this case, it is reduced to one inquiry; whether in legal effect the deed from. Cotte and-wife -to Sands included the land in question? If it-did; Cotte . parted -with the title, and consequently Bell took nothing by;the convey- .. anco to him from Cotte; and the plaintiff derived no valid title . uudqr his deed from Bell, and. can-convey none to the defendant. Referring to the -description in the' deed from Cotte to Sands, we ' find the following: “ Thence-easterly along said southerly side of - Ninety-seventh -street,- eighty-seven; feet, eight and - one-quarter inches to the westerly ■ side ,of Bloomingdale-.road,, and thence .southerly, along ¿said- westerly side, of the Bloomingdale. road two hundred arid three feet and six. inchesjo the-point of. beginning?’ , It is contended by the plaintiff that this description-does not extend beyond the westerly side of the Bloomingdale road, as ,it ' formerly existed. The defendant insists that it extends to the centre of such road, and .therefore includes' the land in question. Considering the starting point in the description, u beginning.at a point formed by the intersection of the westerly side of the Bloomingdale road, with the northerly side-of. Ninety-seventh street,” in connection with the concluding part of suph description given above, we.are of the . opinion that the effect must be to exclude the land in-question, and we think the phraseology employed in the deed from- Cotte to Sands shows that-such, was the intention of the parties. It will be observed that in the. same description the parties were particular . to provide in regard to Ninety-sixth . and Ninety:geYenth , streets,. that, the line should extend to the centre- of s.uck. streets. We may fairly, infer-that if suck had been the intention in regard-to the line -in question,-a 'like, provision •would have been inserted in the description. All the circumstances indicate that the parties intended- to -restrict the .grant.1 ,by Cotto to Sands to and along the westerly side of the Bloomingdale road, and such, we conclude, -is the legal effect which should be given to such conveyance. (Jackson v. Hathaway, 15 Johns., 449; Wetmore v. Law, 34 Barb., 515; Wallace v. Fee, 50 N. Y., 694; English v. Brennan, 60 id., 609; White's Bank v. Nichols, 64 id., 65; Mott v. Mott, 68 id., 246; Patten v. N. Y. Elevated. R. R. Co., 3 Abbot. [N. C.]; 341.) It’follows that -the plaintiff has established title to the land in question, • and is capable of conveying to-the defendant such title in-accordance with the agreement. Judgment must; therefore, be entered in--favor-of'the plaintiff against the- defendant.

Daniels and Potter, JJ., concurren.

Judgment ordered-in favor of‘plamtiff,'agaiiistdefeiidant.


text:
    ALBERT LUHRS, Plaintiff, v. BARBARA EIMER, Defendant.

      Descent — alienage.
    May 1st,' f 866, 'one Schlegel, who' had been "naturalized in'1852, died seized'of certain real estate, leaving him surviving his widow, since dead; his father, á • native of Germany, who died June 22, 1866; a sister, who came to this country, in Í857, and who, previous to his death, had married a citizen of the United States, and who, after his death, was naturalized; a nephew, who came to this - 'country in 1864, and was then sixteen years old, and was naturalized in' 1870; and a niece, who came to this country'in 1865, and. Was .then fifteen years old, who has never been naturalized.

      Held, that-the married sister became seized of all the real estate of her brother, ' by descent from him, and - that she did' not take through her father, who Was ■ :.an. alien,' .. ...-.....

      ■ Controversy submitted upon an agreed statement of facts under section 1279 of the Code of Civil Procedure.

      JSTehrbus <& Pitslike, for the plaintiff.

      Lewis L. Goebel, for the defendant.
   Ingalls, P. J.:

The parties hereto entered into an agreement by which the defendant contracted to sell and convey, and the plaintiff agreed to purchase, certain premises situated in the city of New York. The plaintiff refused to accept a conveyance upon the ground that the title of the defendant to the land was defective. Of the nnmerous facts contained in the case, a few only seem to be important in determining the question submitted. Jacob Schlegel; a native of Germany, came to this country in the year 1847, intending to become a citizen, and was naturalized in 1852. On the first day of May, 1866, he received a conveyance, and became the owner of the land in question. He died intestate in the city of New York, on the thirteenth day of May, 1866, seized in tee of said premises, and leaving him surviving his widow, Rebecca Schlegel, who has since, died; his father Ludwig Schlegel, a native of Germany, who never visited this country; and who died June 22, 1866, The defendant, who was his sister, came to this country in the year 1857, and previous to the death of her brother, Jacob Schlegel, married one Gottfried Bauer, who was at the time a citizen of the United States. The defendant became naturalized subsequent to the death of her said brother. The defendant, after the death of her said husband, married Christian Eimer. The said Jacob Schlegel also left him surviving a nephew, Louis Gompper, who came to this qountry from Germany in the year 1864, and was then sixteen years of age. He was naturalized in the year 1870. Also a niece, Catherine Gompper, who was a native of Germany, and came to this country in the year 1865, and was then fifteen years of age. She has not been naturalized, or even filed an intention to become a citizen. The nephew and- niece are the children of Catherine Gompper, who was a sister of the said Jacob Schlegel. She was a native of Germany, and died there in the year 1852. The defendant, by her marriage with Gottfried Bauer, who was a citizen of the United States, became herself a citizen before the decease 'of her said brother, Jacob Schlegel, and was, therefore, capable of 'talcing title to real estate by descent at the time of his death. (Burton v. Burton, 1 Keyes, 359.) Ludwig Schlegel, the father of the Intestate, being at the decease of his said son, a non-resident alien, was incompetent to take any estate or interest in the said land. It seems to follow that the defendant, at the decease of her brother, .Jacob Schlegel, became seized of said land, by descent directly ■from her said brother, and not from or through her said father, who was an alien. (Smith v. Mulligan, 11 Abb. [N. S.], 438 ; McGregor v. Comstock, 3 N. Y., 408; People v. Irvin, 21 Wend., 128.) The nephew and niece, Louis and Catherine Gompper, took no interest in the land, as they were both alien at the decease of the said Jacob Schlegel. We fail to perceive that they acquired any estate under the statute of 1845, chapter 115. The defendant being competent to take the estate at the decease ■of her brother, there eould be no escheat, and the various statmtes upon that subject, to which we have been referred, cannot, in our judgment, affect this case. The title having once vested in the defendant, could not be divested by such statutes. (Dash v. Van Kleeck, 7 Johns., 477 ; Wood v. Oakley, 11 Paige Ch. R., 400 ; People v. The Supervisors of Ulster County, 63 Barb., 84 ;. Westervelt v. Gregg, 12 N. Y., 202.) We conclude that, upon the-facts and the law applicable thereto, the defendant is possessed of a good title to said land, and is capable of conveying the same to the plaintiff. The defendant should, therefore, have judgment in due form against the plaintiff.

Potter and Daniels, JJ., concurred.

Judgment ordered for defendant against the plaintiff*.


text:
    ELLEN M. PIKE, Respondent, v. PHILIP J. SEITER, Impleaded with BARBARA A. SEITER and others, Appellant.

      .Liability of vendee in a'contract of sale assuming a mortgage — not tiff icted by the deed being made to his-wife.

    Defendant Seiter entered into a written agreement, by which he agreed to purchase certain real estate and to pay therefor §34,000, part in cash and part by assuming the payment of a mortgage on the premises, for the "foreclosure of which this action was brought. By the request of Seiter, the deed was made ■to his wife. Upon appeal from a judgment in this action, holding Seiter liable for any deficiency, held, that the agreement of Seiter to pay the mortgage inured to the benefit of the owner thereof, and that his liability was not aifected by the fact that, at his request, the deed wasmade to his wife.
    Appeal by Philip J. Seiter from a judgment entered upon the ■trial of this action by the court without a jury. The action was brought in-the county of New York to foreclose a mortgage, and charge the defendant Seiter with any deficiency that might arise upon the sale.

      Philip J. Joachimsen, for the appellant.
    If the defendant Seiter -did not fulfill his contract with Schlcsingcr, he -became liable for damages to Schlcsingcr as if on a common-law liability only. Such damages can be recovered in an action on a money demaud on contract. In such action the defendant is entitled to ■a trial by jury. Eor such a purpose this action could be severed. (Sec. 2, art. 1, Const, of the State; Former Code, § 253; Hunt v. Chapman, 51 N. Y., 557; Bathgate v. Haskins, 59 id., 539.) Mr. Seiter never was the grantee of the premises. He never-had an estate in them, and he has not, therefore, become either a principal debtor-or a surety to the mortgagee. (Garvey v. Rogers, 47 N. Y., 263; Barlow v. Meyer, 64 id., 41; Merrell v. Creen, 55 id., 270; FEtna JSf. B. v. Fourth N. Bk., 46 id., 92;a|# Sandford v. Travers, 40 id., 144; Simsony. Brown, 68 id., 355; Johnson v. Morgan, 68 id., 494; Fork v. Ridge, 41 id., 201.

      William A. Beach, for the respondent.
    The demand of the appellant for a jury trial of the issues joined as to him was properly denied, (Const., art. 1, § 2; 2 R. S,, 191, § 154; Dunldey v. Van Duren, 3 Johns. Ch., 330; 2 Dan. Ch. Pr. [4th Am. ed.], 1080.) If the appellant desired a .'trial by jury of any question of fact involving his personal liability for the mortgage debt, he should have made a motion for that purpose, under General Rule 40, of 1874. (Rule 31, of 1878.) The appellant is liable to the respondent for deficiency under his agreement in the contract to assume the mortgage in suit. An agreement made between a debtor and a third party, for the benefit of a creditor of the former, can be enforced by such creditor. (Schermerhorn v. Vanderheyden, 1 Johns., 139; Lawrence v. Fox, 20 N. Y., 268 ; Dingeldein v. Third Ave. Ii. II. Co., 37 id., 575 ; Barker v. Bradley, 42 id., 316; Cooley v. Howe Machine Co., 53 id., 620; Glen v. Hope Muí. L. I. Co., 56 id., 379; Fischer v. Same, '3 L. & E. Rep., 654; Barlow v. Myers, 64 N. Y., 41; Arnold v. Nichols, 64 id., 117; SimsonY. Brown, 68 id., 355; Buvtcy. Beers, 24 id., 178; BlyerY. Monholland, 2 Sandf. Ch., 478; Thorp v. KeokiCk Coal Co., 48 N, Y., 253, 256.) A legal title is unnecessary in equity, and immediately upon the making of the contract the pui’chaser (in this case the appellant) is considered the owner for all purposes whatever. (Davie v. Beardsham, Cas. inChy., 39; Lingen v. Soury, 10 Mod., 39; Atclierley v. Vernon, id., 518, 526; Daniels v. Davison, 16 Ves., 219; Hull v.. Vaughan, 6 Price, 157, 167; Mortimer v. Capper, 1 Bro. Chy., 156 ; Kenney v. Wixham, 5 Madd., 355-; Champion v. Brown, 6 Johns. Chy., 398; Cogswell v. Cogswell, 2 Edw. Chy., 231, 239; Lowrey v. Tew, 3 Barb. Chy., 407, 414; Mott v. Coddington, 1 Robt., 267, 276; Leiois v. Smith, 9 N. Y., 502.) .The appellant being personally liable for the mortgage debt, the court had power lo make a decree against him for deficiency in this action. '(2 Rev. Stat., 191, § 154; Curtis v. Tyler, 9 Paige, 432; Cornell v. Prescott, 2 Barb., 16; Bussell v. Pistor, -7 N. Y., 171.)
   Ingalls, P. J.:

On the 20th day of May, 1875, Jonas Schlesinger and Phillip J. Seitcr entered into a written agreement, by which the latter agr*eed to purchase of the former certain premises known as lot 465 Fourth avenue, in the city of New York, and to pay therefor $34,000, a portion thereof in cash, and the residue by assuming the payment of two mortgages, then being incumbrances upon the same promises, and one of which has been foreclosed in this action. By the direction of Phillip J. Seiter the deed of the premises was executed to his wife by Schlesinger. Upon the trial judgment of foreclosure was directed by the court, and in case there should be a deficiency upon the sale of the premises, it was further adjudged that Phillip J. Seiter should be liable therefor under his covenant to assume the payment of the mortgage. Judgment has been entered in accordance with the decision, and the defendant, Phillip J. Seiter, appeals from the portion of the judgment which declares him liable for the deficiency. The facts clearly show that Phillip J. Seiter purchased the premises, and, as part of the consideration, assumed to pay the mortgage in question. By such arrangement the mortgage debt became his to pay, and his undertaking, based, as it was, upon a valid and adequate consideration, inured to the benefit of the owner of the mortgage. He voluntarily adopted such mode of paying a debt -which he contracted by purchasing the property in question. (Thorp v. The Keokuk Coal Co., 48 N. Y., 253 ; Lawrence v. Fox, 20 id., 268 ; Burr v. Beers, 24 id., 178 ; Barker v. Bradley, 42 id., 316.) The conveyance of the premises to the wife of Seiter, by •his direction, cannot, in our opinion, relieve him from liability by virtue of his covenant, any more than if he had accepted a conveyance to himself, and subsequently vested the title in his wife. (Bennett v. Abrams, 41 Barb., 620.) This being purely an equity-action, the defendant has no absolute right to have any question .involved submitted to the jury; that was matter of discretion with the court to submit or not as it deemed proper.

The judgment should be affirmed, with costs.

Daniels and Potter, JJ., concurred.

Judgment affirmed, with costs.


text:
    THE LOUISIANA NATIONAL BANK OF NEW ORLEANS, Respondent, v. FREDERICK SCHUCHARDT, LAWRENCE WELLS and EDWARD L. WELLS, Appelants.

      Unconditional promise to accept a bill of exchange — what alteration of the bill amounts to dranñng a new bill.

    •The section of the Revised Statutes providing that an unconditional promise in writing to accept a bill, before it is drawn, shall be deemed an actual acceptance in favor of every person, who, upon the faith thereof, shall have received the bill for a valuable consideration, is to be reasonably construed with a view to accomplish the purpose intended.
    ■Where, after a bill of exchange has been negotiated, upon condition, however, of its acceptance, the drawer, at the suggestion of the drawee, writes upon its face “payable through the clearing house,” such alteration amounts to the drawing of a new bill, within the meaning of said statute, so that a promise to accept made after the conditional negotiation of such bill and just before such alteration is to be considered as made “ before it is drawn.” ,
    Upon the facts of this case, held, that the promise of the defendants to accept the bill of exchange in suit, was an unconditional one, and that defendants were liable thereon.
    Appeal from a judgment in favor of tlie plaintiff, entered upon the trial of this action at the New York Circuit, by the court without a jury.

      James W. Gerard, for the appellant.

      Win. D. Scott, for the respondents.
   Ingalls, P. J.:

This action was brought by the plaintiff’ to recover upon two bills of exchange- — one for $10,000, the other for $20,000. Upon the trial judgment was directed in favor ef the plaintiff upon the last-mentioned bill of exchange, amounting to $24,554.20. The appellants insist that they are not liable, because the plaintiff failed to establish an unconditional promise on the part of the defendants to accept said bill before its execution. The plaintiff’s right to recover depended upon its establishing a promise to accept said bill within the meaning of the following statute, Yol. 1, 722, sec. 8 (Edm, ed.), Revised Statute, which provides as follows: “An unconditional promise in writing to accept a bill, before it is drawn, shall be deemed an actual acceptance in favor of every person, who, upon the faith thereof, shall have received the bill for a valuable con-. ■(¿deration.”

Upon the trial the court decided that the facts proved established such promise to accept, in regard to the bill of exchange for $20,000,. and directed judgment accordingly. The findings of fact by the court are very full and particular in regard to the transactions which gave rise to such bills of exchange, and the negotiation thereof. It appears that for a period of ten years, previous to the transactions in question, tlie firm of Cavaroo & Son, the parties who drew the bill of exchange in question, and who resided in New Orleans, were in the habit of drawing bills of exchange, upon parties who resided in France and England, and sending them to the defendants at Now York, to be sold by them upon commission. On the 26th day of September, 1873, the negotiation was opened, mid continued by letter and telegram in reference to the two bills of exchange which are the subjects of this action. On said twenty-sixth day of September Cavaroe & Son telegraphed to the defendants as follows: “ Can you sell exchange now, mid at what price;” and on the same day mailed a letter to the defendants, which contained the following: “We purchased to-day cotton for the account of different friends, and sent the above dispatch (recited in letter,) to know if you could do better at New York than vre here, where it is impossible to sell exchange.” The defendants replied the same day by a telegraphic dispatch, as follows: “ Exchange very irregular; sterling about throe; francs about five-fifty; if sending, don’t draw on us until receiving telegraphic advice of sale.” On the- same day defendants wrote to Cavaroe & Son, reciting the said» telegram, and saying: “ Everything is so deranged, and.money is so scarce, that it would not be convenient for us to enter into any engagements before being assured of the sale of exchange; but on these-conditions our services are always at your entire disposal.” On the- 27th' September, 1873, Cavaroe & Son sent to defendants a large amount of exchange, and on the first day of October following by telegram directed the defendants to sell the same. On the- 2d day of October, 1873, they drew tbe. bill of exchange as- follows::-

“Exchange.for $20,000. New Orleans, October 2d, 1873.
“ At sight of this first of exchange (second unpaid,) pay to the order of Henry Blache, Cashier, twenty thousand dollars, value received, and charge the. same to account.
“ G CAVAROE & SON.
“ To Messrs. F. Schuchardt & Sons, New York.
“No. 3233.”

On the same day the bill of exchange was sold to the. New Orleans National Banking Association, of which Henry Blache was cashier, and on the same day the said C. Cavaroe, Sr., who was president of said banking association, as well as a member of said firm of C. Cavaroe & Son, applied to the plaintiff to purchase said last-mentioned bill of exchange, and for the purpose of inducing the plaintiff to purchase the same, represented that it was also drawn against the proceeds of said exchange on Masquelier, Fils & Co. and F. Dumont & Co., which had been sent to the defendants for sale.

Thereupon said' bill of exchange for $20,000 was left by C. Cavaroe, Sr., with the plaintiff, which- received the same into its possession, but not as the owner of such bill of exchange. The plaintiff at the time declined to become the purchaser thereof, as said C. Cavaroe was expecting to receive a telegram from the firm of F. Schuchardt & Sons, announcing a sale of said bills of exchange, drawn by the firm of C. Cavaroe & Son upon the firms of"Masquelier Fils & Co. and F. Dumont & Co., and refused to make such purchase until such telegram should be received and shown to-them. On the following day, October 3, 1-873, the said C. Cavaroe & Son received from the defendants the following telegram: “New York, October 3, 1873, to C. Cavaroe & Son : sold hundred Masquelier, same Dumont, about thirty-five five-eighths, less quarter. Gold, ten one-quarter;- make drafts pay able through clearing-house-; sterling, six three-quarters; market weak. Signed, Schuchardt.”

On the 3d day of October, 1873, the said C. Cavaroe again applied to the plaintiff to purchase said draft for $20,000, at the same time exhibiting the said telegram from the defendants, and thereupon, for the purpose of conforming the said bill of exchange to the directions of said telegram, a clerk of the plaintiff, under the directions of C. Cavaroe, Sr., altered the same by causing the words, “payable through the clearing-house," to be written across the face thereof. Thereupon, and on the same day, the plaintiff, on the faith of said telegram of October 3, 1873, and of the letter and telegram of September 26, 1873, and relying upon tho representations made to plaintiff by said C. Cavaroe, that the firm of F, Schuchardt & Sons would pay the said bill out of the proceeds of the bills of exchange drawn by said Cavaroe & Son on Masquelier Fils & Co. and F. Dumont & Co., purchased and received the said bill of exchange for $20,000 from C. Cavaroe, Sr., the president of said New Orleans National Banking Association, so altered as aforesaid, paying therefor to said C. Cavaroe, as president of said last-named banking association, the sum of $20,000. At the time the plaintiff purchased and received such bill of exchange; the same was duly indorsed' in blank by the payee named therein. On the 7th day of October, 1873, said bill of exchange was duly presented for payment to the defendants and payment demanded; which was refused. On the 4th day of October, 1873, the firm of C. Cavaroe & Son suspended payment, up to which period they were in good credit. Two of the defendants, Frederick Schuchardt and Lawrence Wells, were declared bankrupts, and were discharged from their debts subsequent to the making of said bill of exchange and previous to the trial. Judgment was directed by the court and entered against all the defendants, to be collected out of their joint property, or the separate property of Edward L. Wells. We are satisfied that the recovery can be sustained upon the facts found by the court and the legal principals applicable thereto.

The facts show very clearly that the plaintiff purchased such, bill of exchange, relying upon tho correspondence, by letter and telegrams, between the defendants and C. Cavaroe & Son, especially the telegram of October 3, 1873, which directed tho manner the drafts should be made payable, viz., “through the clear? ing-house.” In accordance with such direction, the bill of exchange in question was changed by C. Cavaroe, who was at the time president of the New Orleans Banking Association, and also a member of tho firm of C. Cavaroe & Son, and the person who had the actual possession of said security and negotiated the sale thereof.

The following propositions are established by the facts proved: First, that the defendants at the time the bill of exchange was purchased by the plaintiff, were in possession of funds of C. .Cavaroe & Son, derived from the sale of exchange. Second, that such fund was by express understanding to be drawn against by C. Cavaroe & son. Third, the defendants by the telegram of October 3, 1873, which clearly indicates that it was prompted by prior.correspondonce, prescribed the particular form and manner in which the draft should be drawn upon them with reference to such fund. Fourth, the plaintiff refused to purchase said bill of exchange, until the receipt from the defendants of said telegram of October 3, 1873, and an inspection thereof. Fifth, no other person challenges the right or authority of C. Cavaroe to negotiate the sale of said bill of exchange.

As between the plaintiff and defendants it must be regarded, in view of all the facts and circumstances, as having been drawn subsequent to the receipt of tlie telegram of October 3, 1873. Up to that time the plaintiff had refused to purchase, and by express declaration, made all negotiation in regard thereto, to depend upon the receipt of that telegram. Again, the alteration of the bill in regard to the mode of payment was in our judgment equivelant to the drawing of a new bill. Certainly it cannot be regarded as an immaterial alteration of the instrument. (Nazro v. Fuller, 24 Wend., 374; Woodworth v. Bank of America, 19 Johns. Rep., 391; Calvert v. Roberts, 3 Campbell, 343.) No question is raised in regard to the authority of Cavaroe, to alter and negotiate the bill of exchange. The plaintiff purchased in good faith, and paid an adequate consideration for the bill. The statute in question is not penal, and is entitled to a reasonable interpretation with a view to accomplish the purpose intended. Such construction should not be so liberal as to amount to judicial legislation, nor so technical as to defeat the beneficial purpose intended. We, therefore, conclude that the promise of the defendants to accept the bill of exchange was unconditional and made before it was drawn, and that the defendants are therefore liable thereon., ( Ulster Co. Bank v. McFarlan, 5 Hill., 432; Barney v. Worthington, 37 N. Y., 116; Johnson v. Clark, 39 N Y., 216; 3 Vol. Kent's Com., 83, 84, note [5th ed.])

There does not seem to be any equity established in favor of the defendants, and the claim of the plaintiff is sought to be defeated upon the merest technicality. We db not think the law demands so- rigid a construction of the statute in question as will enable the. defendants to accomplish a result so unjust. The discharge in bankruptcy of' two of the defendants did not entitle them to a dismissal of the complaint. In this respect the learned judge at the Circuit made a proper disposition of the case, relieving those defendants from personal responsibility for the debt.

The judgment should be- affirmed, with costs.

Daniels and Potter, JJ., concurred.

Judgment affirmed, with costs.


author: Potter, J.:

text:
    NICHOLAS LUDLUM as Executor, etc., of BENJAMIN B. LUDLUM, Appellant, v. ADELIA L. OTIS as heir-at-law and next of kin, and as Administrator with the will annexed of BENJAMIN B. LUDLUM, Deceased, Respondent.

      Will — when, revoked by a subsequent one — Meaning of “natural heirs” — Incorporation of unexecuted paper in vMl.

    A testator in-1869 executed, in the city of New York, a will, whereby he devised his interest in a house and lot in said city to two cousins. In April 30th, 1S75, at Nyon, in Switzerland, he executed, in accordance with the laws of this State, a second will whereby, after giving certain legacies to his servant, he devised the remainder of' his property all situated or invested in America, to his natural heirs. The second will did not in express terms revoke the first; held, that the first will being inconsistent therewith, was revoked by the second.
    The testator left him surviving, a mother, a sister and cousins, but no widow or children; held, that by the term his “ natural heirs ” the testator meant his mother and sister.
    "When a reference in a will to an unexecuted paper is not sufficient to incorporate the same into such will.

      Appeal from a decree of the surrogate of New York admitting to probate a will propounded by respondent, and refusing probate to one offered by appellant. Probate of the -will first executed by the testator was refused on the ground that it was revoked by a later one executed April 30th, 1875, at Nyon, in Switzerland. The latter will' was in French.
    By it, according to the respondent's translation, the testator gave certain legacies to his servant, and by article third, as to the remainder of his property, all situated or invested in America, the testator declares that such property is, in consequence of an arrangement, to go to his natural heirs (lieritiers naturels). Under these circumstances he declares that he constitutes them his heirs; he consequently declares that these heirs shall take the property situated in America.
    The words “qu ensuite cl’ammgement ces biens doivent revenir a ses lieritiers naturels,” in the first clause of this article third, Avere translated by the appellants “ that in consequence of dispositions made, such property is1 to go to his natural heirs,” and by the respondent as is given above.
    April 17th, 1874, the testator executed AArhat purported to be a codicil to his Avill of 1869, but the same Avas invalid, because not attested by any Avitness. By this, after giving certain legacies, he deAÚsed “all the rest, residue, and remainder of my estate, both real, personal and mixed,”- to the two cousins to Avhom the real estate Avas devised by the first will.

      Wash <& Holt, for the appellant.

      Goudert Brothers, for the respondent.
   Potter, J.:

This is an appeal from the decree of the surrogate of the city and county of Noav York, refusing to probate a will and testament made hy Benjamin B. Ludlum, dated October 18, 1869, upon the ground that the same had been revoked by a subsequent will made by the said Ludlum, at Nyon, in SAvitzerland, April 30, 1875, and admitting the latter Avill to probate instead of the former.

It is conceded that the former Avill Avas duly executed, and was ■ propounded, by tbe appellant as executor thereof. The respondent, who is the sister of the testator, opposes the probate of the first will, and propounds the second will for probate, under which she claims as devisee all his estate situated in New York. The testator left him surviving only his sister, respondent, and his mother, the latter of whom died before the will was propounded. ■ The first will having been duly executed, these questions are pre■sented upon this appeal, viz.: Was the wfill of April, 1875, executed in Nyon, Switzerland, properly executed to devise real estate situated in New York? Did such will revoke the former .will of October, 1869, executed in New York ? Is the respondent the devisee under the second will ?

The manner and circumstances attending the execution of the second wfill are substantially these: The testator sent for Gabriel Dufone, a notary, residing at Nyon, with whom he was acquainted, to draw his will. There were present with the testator' and the notary two other persons, who wore also acquainted with the testator and the notary, and who were sent for by the testator to witness the will. In their presence the testator stated to the notary that he wished him to draw his will, and that he had sent to him and the witnesses to come for that purpose. He gave the instructions and dictated the will to the notary in presence of the witnesses, who heard the instructions, and the will was drawn by the notary in their presence, and the testator signed it in their presence after it had been read to him. The testator requested one of the witnesses to witness it in presence of the notary and of the other witness, and the other witness was requested by the notary to witness it in the presence of the testator, and the other witness, and both the witnesses signed it, and also the notary, and all the signatures were made in the presence of the four persons named. We think these acts and declarations constitute an execution of the will according to the laws of the State of New York, where the property devised was situated. (Brinckerhoff v. Remsen, 8 Paige, 488; Gilbert v. Knox, 52 N. Y., 125; Campbell v. Logan, 2 Bradf., 98; Moore v. Moore, 2 Bradf., 265; Thompson v. Stevens, 62 N. Y., 634; Peck v. Cary, 27 id., 9.)

No question or suggestion is made that the second will was not a valid bequest of the personal estate of the testator. This will, therefore, disposed of all the known property which belonged to the testator. Did this will revoke the former will ?

A will which makes a. full disposition of all the testator’s property is inconsistent with the existence of any prior will, and ' therefore amounts to a revocation of all wills previously executed. ■' (Simmons v. Simmons, 26 Barb., 68.) And so a second will containing provisions inconsistent with a former will revokes the former will in respect of the inconsistent portion. (Brant v. Wilson, 8. Cow., 56; Nelson v. McGiffet, 3 Barb. Chy., 158; 2 R. S., tit. 1, chap. 6, § 48 [original page, 65].) So effectual is the revocation by a subsequent will,' that the making and destroying of a second will, or revocation by subsequent will, will not revive the first will, unless it appear by the terms of such revocation that it Avas the intention of the testator to revive and give effect to his first Avill, or unless the first Avill be duly republished. (2 R. S., § 53 [original page, 66]). We must conclude, therefore, that the first will was revoked by the second. This brings us to the consideration of the question, what disposition did the testator make of his property, situated in New York, by moans of the second will? The structure and language of the will itself are singularly inexplicit. Instead of naming the devisees, as is easy and usual, and as he did in his first Avill and attempted eodi,.cil, he devises the property to so indefinite a devisee as his natural heirs ‘■'■heriliers naturels,” and refers to some former arrangement or disposition, and to increase the difficulty and uncertainty in this regard, the second will is expressed in the French language, and the translators-differ in their translations of it.

• It is contended upon the part of the appellant, Avith a good degree of plausibility and force, that the third article of the will, which disposes of the NeAV York property as the remainder of his estate, refers to a former arrangement or disposition of that property in such a manner as to make that arrangement or disposition a part of-the second will, and that the devisees designated by that instrument are the testator’s cousins John and Robert Ludlum, and avIio are also mentioned by name as the devisees of a part of his estate under the first will. It is conceded that this paper, though purporting to be a codicil to the first will, is so defectively executed as to-be invalid as a Avill. This codicil purports to dis-' pose of all the testator’s property, and the devisees and legatees therein are mentioned by name. Is this codicil so referred to in the last will as to constitute a part of it?

The rule upon this subject, as dei-ived from the cases, will be found in 1 Bedfiold on Wills, 261, as follows: That if a testator in his will refers expressly to any paper already written, and has so described it that there can. be no doubt of the identity, that paper, whether executed .or not, makes part of the will; but there must be no reasonable question of the identity of the paper and of its existence at the date of the will. (Habergham v. Vincent, 2 Ves. Jr., 204, 228; Dillon v. Harris, 4 Bligh, [N. S.], 329; Thompson v. Quimby, 2 Brad., 458.) In Smart v. Prujean (6 Ves., 519), the rule is stated thus: The properly'.attested instrument, in order to have a paper incorporated into it, must describe it so as to be a manifestation of what .paper is meant, in such .a way .that the court can be under no mistake.

It is the -contents of a paper that may -be incorporated into a well executed will. The third article of. this Ny.on will does not :in terms refer to a paper; it is. simply an arrangement or disposition which may or may not be expressed in a paper. It may refer to the codicil by which the testator attempted to give his property to his cousins, or it'may refer-to a -vexhal arrangement, disposition or ixnderstauding which reconciled ..the testator with his mother and sister, and induced him to .change the objects of -liis bounty. If it had been meant to refer to the codicil, it was both-easy .and natural to have .named the codicil by its ¡date,-by'whom, when, and where made, and with whom deposited, as the testator-did in this codicil to his first will. If it referred tq.an unwritten arrangement, understanding or reconciliation between him .and his mother- and sister, the reference to it would necessarily ..be indefinite. It was obviously some arrangement or disposition by which he gave, or by which ho was induced to.give .his -New York .property to his natural heirs. Who were■ his -natural heirs? We. should say,.to a-man, reared and educated-in Now York,-the term natural heii's, would be understood and regarded .as a-mother and sister, rather than cousins in any degree. We -must conclude, that the reference, to some ai'rangement or-dispositionis too doubtful.and. unsatisfactory to .allow of the incorpoi’ation of the ;paper,-. called a codicil into the last or Nyon will. It results -from these views that the devise of the New York property is to his mother nnd sister as his natural heirs, or that the devisees-are so indefinite as to invalidate it as a devise to any one; -and in that case the property descends to the mother and sister, and after the death of the mother to the sister alone.

The decree should be affirmed, with costs to both appellant and -respondent, to he paid out of the'estate.

Ingalls, P. J., and Daniels, J., concurred.

Decree affirmed, costs of appellant and respondent to he paid out of the fund.


text:
    WILLIAM SMYTH as Acting Superintendent of the Insurance Department of the State of New York, Respondent, v. LOTIO LOMBARDO, Impleaded with others, Appellant.

      Superintendent of Insurance Department — power of-deputy — power to foreclose mortgage — 'when mortgagor estopped f ram setting up-usury.

      A bond and mortgage executed'by the defendant were, with his consent, assigned by an insurance company, as required by law, to 0. "W. Chapman, Superintendent of the Insurance Department of the State-of New York; during a vacancy in the-office of superintendent, caused by his-resignation, the plaintiff, the deputy superintendent, brought this action to foreclose the ■ mortgage. Held (1), that plaintiff was authorized to perform the duties of the office of the superintendent during a vacancyin that office; (2), that the superintendent had full authority to collect the mortgages so assigned to him.
    At the time of the assignment the defendant, the mortgagor, signed a certificate consenting to the assignment by the mortgagee, and stating that the whole -principal sum, and interest thereon from its date, 'was due and that there was no offset to or legal or-equitable defense against the mortgage. The superintendent testified that he had no knowledge that .-any of the .principal had not heen paid to the mortgagor, and that he would not have taken it if he had had any notice of usury.

      Held, that the defendant was estopped from setting up .the defense of usury.

      Appeal from a judgment in favor of the plaintiff, entered in 'the county of New York, upon the trial of this action by the court without a jury, and from an order denying a motion for a new trial made upon a case and exceptions.

      V. Wright Kingsley, attorney for the appellant.

      A. Schoonmdleer, Jr., Attorney-General, attorney for the respondent.
   Potter, J.:

! This is an appeal from a judgment rendered upon a decision of the court at Special Term, and from an order denying a motion to set aside such judgment and for a new trial. The action was brought for the purpose of foreclosing a mortgage deposited with the superintendent of “the insurance department, under chapter 463, Laws of 1853.

The defenses set forth in the answer are: 1st. That plaintiff has ■no legal capacity to maintain the action. 2d. That the mortgage .is void for .usury. The statute, chapter 463, section 6, requires that life insurance companies shall deposit with the superintendent of the insurance department a certain amount of stocks or bonds and mortgages. This deposit is made by each company '■With the superintendent of the insurance'department, in trust for the benefit and security of the holders of its policies' of insurance. The superintendent has full authority to collect, as well as to distribute the avails of the securities. The transfer of the mortgage ,in question was made in terms to O. W. Chapman, as superintendent of the insurance department of txie State of New York, and .'with the knowledge and written consent of the defendant himself. .The superintendent is plainly a trustee, and is the proper party to bring the action.

There was a vacancy in the office of superintendent at the time this,action was commenced, caused by resignation. Smyth, the ■plaintiff, was the deputy of the superintendent at the time of the resignation, and by virtue of section 2 of chapter 366 of the 'Laws of 1859, became possessed of the power, and authorized to perform the. duties pertaining to the office of the superintendent during the vacancy. Wo think the action well brought by the plaintiff as acting superintendent. The appellant claims that the mortgage was usurious and void; or that evidence tending to prove the mortgage was usurious was improperly excluded. by the court, and that a new trial should be granted for that reason.

Before considering that question, it will be proper and necessary to determine the effect of the certificate signed by the mortgagor before or upon the occasion of the transfer of the mortgage to the superintendent. The instrument or certificate contains a consent of the appellant, who was mortgagor and owner of the mortgaged premises, that the mortgage be assigned by the mortgagee, the Eclectic Life Insurance Company, to the superintendent, etc., and also a statement that the principal of the mortgage, with the interest thereon from its date, is unpaid, and that there is no offset to or legal or equitable defense against the same.

The court below found as a fact that at the time of surrendering the United States bonds, and receiving such bond, mortgage and assignment in exchange therefor, said superintendent had no knowledge or information that any part of the consideration qf such mortgage remained unpaid to said appellant, or that said company had not paid him the full sum of $80,000, and there was no exception to that finding. The superintendent, moreover, testifies, and his testimony is uncontradicted, that he would not have taken the mortgage if he had had any notice ,,f "sury, and that he took it upon the faith of that certificate, and it cannot be doubted that the purpose of the certificate of the appellant was to induce him to take the mortgage. Is the appellant estopped from proving and insisting upon tbe. defense of usury ? This question is settled by the court.of last resort in Mason v, Anthony (3 Keyes, 609); Payne v. Burnham, (62 N. Y., 69); holding that such facts constitute an estoppel against the defense of usury, however conclusively the evidence would establish it. This conclusion renders the examination or considerations of several exceptions unnecessary. The exception to the ruling of the court upon this question, who is at present the superintendent, was not well taken, for the reason stated for the exclusion, and also that the inquiry should have related to the time of the commencement of the action, and not to the time of the trial. The evidence .'.bowing that plaintiff was the acting superintendent at the time the action was commenced was full, and no exception was taken to tho finding upon that point.

Judgment should he affirmed, with costs.

Ingalls, P. J., concurred.

Present — Ingalls, P. J., Daniels and Potter, JJ.

•Judgment affirmed, with costs.


author: Potteb, J.:

text:
    THE PEOPLE OF THE STATE OF NEW YORK ex rel. CHARLES LOWENBEIN v. CHARLES DONOHUE, a Justice of the Supreme Court.

      Marine Court — A court of record — a justice thereof, may issue a warrant under ‘•iStilweU Act.”

    The Marine Court of the city oí New York is a Court of Record, and a justice thereof has power to issue a warrant for the arrest and commitment of a party in proceedings under the act of 1831 to abolish imprisonment for debt.
    The Supreme Court may, in its discretion, allow a writ of certiorari, even in cases where there is a remedy by appeal.
    Certiorari to review the discharge of Marks II. Julicn upon the return to a writ of habeas corpus.

      Adolph Ozahi, attorney for the relator.

      8. M. Ehrbach, attorney for the respondent.
    Where a review may be had by appeal a writ of certiorari will not lie. (Sara. & Wash. R. R. Co. v. McCoy, 5 How. Pr., 378; In re Mt. Morris Square, 2 Hill, 27; Ex parte Mayor, etc., of Albany, 23 Wend., 283, 284.) But the appeal is also fatally defective. No appeal can be taken from an order made by a judge out of court till the order has been entered in tlio office of tlio clerk. (Section 1304 of Code of Civil Procedure.) Tlie Marine Court lias no jurisdiction to entertain proceedings under the “ Stilwell Act.” The Marine Court, at the time of the passage of .the act, was a Court of Record, so called — that is, a court having a clerk and seal; but as between parties it was not a court of record. (Talcott v. Rosenberg, 8 Abb. [N. S.j, 287; Lester v. Redmond, 6 Hill, 390.) It is a court of limited jurisdiction, and can exercise only powers expressly conferred upon it. (Huff v. Knapp, 5 N. Y., 69.) Its jurisdiction must be shown affirmatively. (Ford v. Babcock, 1 Den., 158.) The question is to be determined by the jurisdiction of the Marine Court as it existed at the time of the enactment of the statute. Penal statutes must be construed strictly. • (Van Volkenburgh v. Torry, 7 Cow., 252.) They cannot be enlarged b'y construction. (Strong v. Stebbins, 5 Cow., 212; Bridgewater, etc., Co. v. Robbins, 22 Barb., 667.) And this being a statute authorizing imprisonment for debt is regarded as a penal statute. (Hathaway v. Johnson, 55 N. Y., 95.)
   Potteb, J.:

A certiorari to the respondent to review his decision discharging Marks H. Julicn upon a writ of habeas corpus from, imprisonment under a commitment, made by one of the justices of the Marine Court pursuant to the provisions of the act to abolish imprisonment for debt.

The relator, doubting whether a certiorari rvas the appropriate remedy, also brought an appeal under section 1356, Code of Civil Procedure. The respondent objected that the rvrit of certiorari was improper, because there was a remedy by appeal, and that the appeal was premature and unauthorized, because the order appealed from had not been cute cd with the clerk of this court. The allowance of the writ of ce. tiorari was discretionary; and, while the general rule is as claimc 1 by the people’s counsel, that the writ will not, in the exercise oi judicial discretion, ordinarily be granted where there is a remeó y by appeal, yet its allowance is not absolutely inhibited in such a case.

In regard to the objection that the appeal was taken before the entry of the order appealed from, it is sufficient to say there is no proof before the court that the order was not, in fact, entered. The question involved is one of considerable practical importance, and it is, therefore, desirable that a decision of it be had without delay on account of technical objections. The question is, whether a justice of the Marine Court has power to issue a warrant for the arrest and commitment of a party in virtue of proceedings under the act to abolish imprisonment for debt, etc., passed April 26, 1831 (chap. 300), and the acts amendatory of tho same.

By section third of the non-imprisonment act, the plaintiff may, in any action, or upon any judgment obtained in a court of record, apply to any judge of that court for a warrant to arrest tho • defendant for the causes specified in section four of that act. Is .the Marine Court of the city of New York a court of record? We find, by reference to the statute (2 B. L., 382, § 107), that such court is declared to be a court of record. It is to be presumed that the Legislature intended to convey the same meaning in tho use of the expression “ court of record” in the statute of 1831 as in the statute of 1813. But, if wc trace the history of tho various statutes in relation to the Marine Court, or consider the jurisdiction it has at all times exorcised in common-law actions, from its organization to the present time, with its appointments, officers, and its various proceedings, it wilt impress every legal • mind that it is a court of record. It has and has had a clerk and a seal. It possessed the power to naturalize citizens until jurisdiction over that subject was taken from it by an act of tho Legislature, passed as far back as 1852. It has jurisdiction to entertain supplemental proceedings upon its own judgments in the same manner as courts of record. (In the Matter of Lippman, 48 How. Pr., 359.)

By an act passed April 14, 1865 (chap. 615, p. 1286), the Legislature provided for references, voluntary and involuntary, of actions pending in that court, and prescribed the mode of reviewing and entering judgments upon the report of tho referee, and, in brief, conferred upon this court all the powers possessed by any common-law court of record, in relation to references, costs and extra allowances. It has appellate jurisdiction to review a judgment rendered by one of its justices.

The Legislature, in 1874, chapter 545, autnorized tho judges of any court of record in New York city to send any action pending therein to the Marine Court. It .is true that act, by a divided court, was held unconstitutional, not because the Marino Court had not jurisdiction, but because no court can divest itself of the duty of entertaining cases that parties chose to bring in that court. (Alexander v. Bennett, 60 N. Y., 204.) In 1872 the Legislature passed an act, chapter 629, declaring it to be a court of record, and using this significant language, to-wit: “to and for all intents and purposes,” greatly increasing its jurisdiction, and providing that the forms of process, and proceedings prescribed by the Code of Procedure in respect to the other courts of record ' should apply to this court.

In 1875 the Legislature, by chapter 479 of the laws of that year, clearly recognized this court as having jurisdiction under the act of 1831, the non-imprisonment act. It provided, in section 2, that no person shall be arrested in said Marine Court, except as prescribed by this act, but this provision shall not affect the act to abolish imprisonment for debt and to punish fraudulent debtors, passed April 26, 1831, or any act amending the same. Its jurisdiction under the act of 1831 is again and expressly recoganizcd by the act itself.

We next notice the declaration in the Code of Civil Procedure. Section two declares that the Marine Court of the city of New York is a court of record. This act professes to be a revising and not a creative act. From those and similar enactments, not deemed necessary to be specified, we are brought to the conclusion that the Marine Court had jurisdiction of the respondent in the proceedings under the non-imprisonment act, and the order granting his discharge should be vacated, and the respondent bé subjected to the warrant of committment and the further prosecution of the proceedings.

As the question involved is one of doubt, and seems to have been disposed of by the court below with the view of having the same presented and decided by the General Term, and perhaps by the court of last resort, and as the costs are in the discretion of the court, we think no costs should be awarded.

Ingalls, P. J., concurred.

Order reversed, without costs.


text:
    WARNER M. RASIN, Assignee of THOMAS MORRELL and C. CUYLER CAMPBELL, Bankrupts, Appellant, v. EDWARD H. AMMIDOWN, JONAS H. LANE, ALBERT D. SMITH and WILLIAM H. KLAPP, Respondents.

      Bankrupt Act, § 5128 — what transactions void under — effect of amendment in 1874 on prior transactions.

    In the early part of November, 1873, the defendants held an over-due and protested note, given to them by plaintiff’s assignors, retail traders in Philadelphia, for goods sold to them. The makers promised to pay the same November, twenty-first, and on their failure to do so, the defendants put it in the ' hands of an attorney at Philadelphia for collection. The makers then saw the defendants, and it was agreed that the note should be extended ; and to secure its payment, a package of lace, worth $3,000, was taken from their store and placed in the hands of another dealer, the proceeds of its sale to be applied upon the note; the makers saying they had made a similar assignment to , secure another and principal creditor. A few days after this was done, the firm, in Philadelphia were thrown into bankruptcy. Held, that the transaction was void under section 5128 of the Bankrupt Act.

      Semble, that a transaction void under said section prior to its amendment in 1874, . and taking place prior thereto, was mot rendered valid by such amendment, although all the connditions required by the amendatory act to make it void did not exist.
    Appeal from a judgment dismissing the complaint, entered upon the trial of this action by the court without a jury.

      Davies & Whitehead, for the appellant.

      Martin & Smith, for the respondents.
   Potter, J.:

This is an appeal from a judgment rendered upon a trial at Special Term dismissing the complaint and for costs. The action was in equity by the plaintiff, assignee in bankruptcy, to set aside a transfer of personal property by the bankrupts to the defendants, who were creditors of the bankrupts, and for an injunction and an accounting for the proceeds of any of the property which had been sold by the defendants. The grounds for such relief are that such transfer ivas made in violation of the provisions of section 5128 of the bankrupt law of the United States. This section 5.128, as it now stands, is an amendment of the original thirty-fifth section of the Bankrupt Act. The complaint is manifestly predicated upon the amendatory section, 5128, though the transaction complained of took place on or about the 12th of December, 1873, A point is made by the respondent on this appeal, that the case is to be decided by the law as found in section 5128, which took its present form in 1874. We doubt the correctness of that proposition. If the transaction ivas declared void by the law as it existed at the date of the transaction, I apprehend it remains a void transaction, notwithstanding the amendatory act may super-add other conditions requisite to make such transactions void, unless, the amendatory act expressly validates the void transaction, and especially so, when the original transaction was void at the common law, as well as by statute, -when' the transaction occurred. • But, however that may be, it is of no present interest, for we are constrained, after a careful examination of the evidence in this case and the decided cases involving the construction of section 5128, that the transaction was void and the judgment should be reversed.

Section 5128, as applied to the transaction in question, reads as follows: “ If any person, being an insolvent, or in contemplation, of insolvency within four months before the filing of the petition by or against him, with a view to give a preference to any creditor,. * * * makes any payment, pledge, assignment, transfer or conveyance of any part of his property either directly or indirectly, * * # the person receiving such payment, pledge, assignment, transfer or conveyance, or to be benefited thereby, having reasonable cause to believe such person is insolvent, and knowing that such * * * payment, pledge, assignment or conveyance is made in fraud . of the provisions of this Title, the same shall be void, and the assignee may recover the property or the value of it from the person so receiving it. or so to be benefited.” Then follows a qualification permitting a security for a loan made in good faith, and taken at the time of making the loan. There were but two witnesses sworn upon the trial — one of the bankrupts and one of the creditors. They do not differ as to the character of the transaction itself, but differ, inmaterial respects, in the facts and circumstances surrounding the transaction.

If the evidence of the bankrupt Campbell is to be believed, there can be no question. The transaction is clearly, if not conféssedly, void. The court below evidently based its findings upon the evidence of the defendant Ammidown. Whether the court should have done so, I will not stop to discuss; for assuming the facts to have been as stated by Ammidown himself, and such as is shown otherwise than by him, wo think the transaction is forbidden and declared void by section 5128. An analysis of the section in question will show that these four conditions must exist to render the transaction therein specified void: First. The person making the transfer must be insolvent, or contemplate insolvency. Second. The transfer must bo made within a certain period of time, and with a view to giving a preference. Third. The person receiving such transfer, or to bo benefited by it, must have reasonable cause to believe such person is insolvent; and Fourth. Must know that such transfer was made in fraud of the provisions of the Bankrupt Act.

Now, what were the facts out of which the transaction in question sprung ? The bankrupts wore, in the forepart of November, 1873, indebted to the defendants, for a bill of goods bought previously, in the sum of twenty-six or twenty-seven hundred dollars. That indebtedness was represented by a note made by the bankrupts on time, and the note had been protested and remained unpaid at the date of this transfer, which was about the 12th of December, 1873. The debt was for a bill of goods sold by defendants, who were jobbers in New York, to the bankrupts, who were retail traders in such goods in Philadelphia. The bankrupts wrote the defendants they would send a check for the bill upon the twenty-first November; but no check was sent or other payment made. The defendants placed the note in the hands of an attorney at Philadelphia, and the bankrupts were notified by the attorney that legal proceedings would be commenced upon the note. One of the bankrupts went to New York and had an interview with the defendant Ammidown, who was a witness, and the result of that interview was, that the time to pay the note was extended, and as . security for its payment a package of laces, a part of the bankrupt’s goods kept for sale, and valued at $3,000, was removed from the bankrupts’ store to the store of one Carson, in the same city, who was to sell the same, and the proceeds were to be applied in payment of this debt. The defendants were informed by the bankrupts, at the time of the transaction, that they had made a similar arrangement to secure another and principal creditor. The bankrupt testifies his firm was, at the'time of this transaction, insolvent, and his statement is corroborated by the fact that within a half a dozen days thereafter a petition in bankruptcy was filed against his firm, and.the defendants were applied to to sign articles of composition.

There are other minor facts going to establish the propositions above stated, but I deem those sufficient to establish them, and will not specify any more. Were the debtors insolvent at the time of the transaction ? That is beyond dispute, and that they know it. Was the transfer made with a view of giving preference to defendants as creditors ? The debtor was insolvent. They had not property sufficient to pay their debts, and they placed a part of their property, and sufficient in value to pay this debt due the defendants, in the hands of another trader to sell and apply all of the proceeds upon the defendants’ debt. A similar arrangement was made with one other creditor, but to no others to whom there was due $15,000 from the bankrupts.' “ With a view to give preference,” must be construed so as to include an intent to give one or more creditors an advantage over others, in respect of payment or security. (Forbes v. Howe, 102 Mass., 427; In re George and Proctor, Lowell, 409.) Every one is presumed to intend what is the necessary and unadvoidable consequences of his acts. (Sawyer v. Turpin, 5 id., 339; Morse v. Godfrey, 3 Story, 364; Toof v. Martin, 13 Wall, 40.) The transfer by a debtor, who is insolvent and aware of his condition, of his property or a considerable portion of it to a creditor as a secui’ity for a pre-existing debt, without making any provision for an equal distribution of its proceeds to all his creditors, operates as a preference to such transferee, and must be taken as prima facie evidence that a preference was intended. ( Wager v. Hall, 16 Wall. [U. S.[, 584.) Had the defendants reasonable cause to believe these debtors were insolvent ? The question is. not, as some of the questions and evidence upon the trial would seem to indicate, whether the defendants believed these debtors wore insolvent. It is not what the defendants believed, but what they had reasonable cause to believe. What reasonable cause . of belief in relation to the debtors’ insolvency had they ? As we have seen, the parties to the transfer were merchants and traders. The note had lain under protest for a month or so. The debtors’ promise to pay it had not been performed, and it had been placed in the hands of au attorney who threatened to take legal proceedings upon it, and the debtors turned over property to be sold and the proceeds applied towards its pay. menu, and they had done a similar thing by another heavy creditor. Ai;o these not reasonable causes to induce a belief of insolvency in the mind of an intelligent and prudent business man ? Facts which would lead prudent business men to the conclusion that the debtor cannot meet his obligations, as they mature .in the ordinary course of business, are reasonable causes for the belief that such debtor is insolvent. (Toof v. Martin, 13 Wall., 40.) Insolvency, when used in this statute in reference to traders, means inability to pay debts as they fall due in the ordinary course of business. (Buchanan v. Smith, 16 Wall., 277; Wager v. Hall, 16 Wall., 584; The Merchants' National Bank of Cincinnati v. Cook, U. S. Court Weekly Digest., vol. 5, 314.) The cases upon this point go much farther than to hold that facts, such as these, are reasonable causes for belief of insolvency. They hold that whatever fairly puts a party upon inquiry is sufficient' notice, where the means of knowledge are at hand; and if a party under such circumstances omits to inquire, and proceeds to receive the transfer, he is chargeable with a knowledge of all the facts, which by a proper inquiry he might have ascertained. (Buchanan v. Smith, 8 Blatch., 153; and 16 Wall., 277.)

The character of the transaction itself is most significant. If tjrc defendants had no reasonable cause for believing the insolvency, why did they not extend the payment, as they did on the original sale of the goods, without security? If solvent, why take' a portion of the debtors’ stock of goods to another place to be sold, instead of allowing the debtors to sell them in the ordinary way, and receive the avails of the sales and pay to all creditors alike? Why stipulate that the proceeds of the sale of these goods should apply upon this debt, if the debtors were solvent, and so able to pay all their creditors? Why remove the goods and place them in the hands of some one else to sell, while it was the business of these debtors to sell those goods? It is obvious that these defendants believed, as they had reasonable cause to believe, that the debtors had not property enough to pay all their creditors, and that some of them might endeavor to levy upon those which were removed, if they remained in the debtors’ possession. The transaction is an extraordinary one, and never happens to many business men without a cause. It only remains to inquire whether the defendants knew the transfer was made in fraud of the provisions of the Bankrupt Act. This conclusion follows almost necessarily, from the facts in the case. This act Avas designed to make a pro rata distribution of an insolvent’s assets among his creditors. It forbids any preference after the filing of the petition in bankruptcy, and authorizes the assignee to commence the proper actions to set them aside, and also preferences made under certain circumstances two or four months prior to the filing of the petition, even though consummated through legal proceedings and the judgment of the highest State or federal court rendered in the due' course of judicial procedure. The defendants are presumed to Iuioav the.Lrw. The arrangement resorted to to accomplish the preference Avas out of the usual and ordinary course of the debtors’ business. That fact alone Avas prima facie evidence of fraud upon the act, and cast the burden of shoAving the non-existence of some of the facts above stated upon defendants. (U. S. R. S., § 5130.) Indeed, it is doubtful whether . the legal title to. the case of laces Avas transferred at all to the defendants, and Avhcther the title Avas not transferred to the assignee by virtue of the assignment in bankruptcy. The debtors, themselves, had the right of sale, as avoII as purchase,' of the goods after the removal of them. . Such a transaction would be clearly void at common laAv, as a fraud upon creditors, and Avould not stand against a seizure by creditors with an attachment or judgment.

The judgment should be set aside and new trial ordered, with costs to abide the event;

Ingalls, P. J., concurred.

Present — Ingalls, P. J., Daniels and Potter, JJ.

Judgment set aside; new trial ordered; costs to abide event.