author: Yah Brunt, P. J. O’Brien, J.

text:
    Charles A. Dorney et al., Resp’ts, v. William M. Thacher, Impleaded, etc., App’lt.

      (Supreme Court, General Term, First Department,

      Filed February, 1894.)

    1. Assignment bob cbeditoes—Accounting.
    Upon an assignee’s accounting, charges for commissions, counsel fees and other disbursements may be disputed and disallowed under a general objection.
    2. Same—Commissions.
    Where such assignment is set aside, commissions are not allowed, except upon such property as was administered and distributed by the assignee prior to the commencement of the creditor’s suit.
    3. Same—Counsel bees.
    If he acts in good faith, reasonable counsel fees for the defense of actions to set aside the assignment will be allowed.
    Appeal from an order confirming report of referee appointed by an interlocutory judgment.

      K. p. Oloyd, for app’lt; Abram Kling, for resp’ts.
   Yah Brunt, P. J.

It is true that this court, in the case of Heywood v. Kingman and Thacher, 29 Abb. N. C., 75 ; in which action an interlocutory judgment had been entered similar in form to the one in the case at bar, decided that upon appeal from an order confirming the report of a referee appointed by such interlocutory judgment, this court could reverse such judgment without having before it a scintilla of the record upon which such judgment was founded. But the conclusion then arrived at, it. seems to me, should not be extended beyond the case which was then before the court.

The question presented by this appeal is whether the referee erred in his disallowance of disbursements made by the assignee and of commissions charged by him. In the consideration of these questions it will not be necessary to state in detail the facts under which they arose. It is urged that the referee erred in disallowing certain disbursements and commissions of the assignee because no proper objections to the assignee’s accounts were taken. And it is claimed that such objections must be specific and must sufficiently appraise him of the charge which he has to meet. In support of this proposition we are referred to the Matter of Mather, 61 Hun, 214; 40 St. Rep. 882, and to the case of Heywood v. Thacher, above cited. It is to be observed that the opinion in Heywood v. Thacher is based upon the case of the Matter of Mather ; and the distinction between the nature of the items objected to in these two cases seems to have escaped the attention of the court. In the Meywood case the objection was a general one to the whole account. In the case at bar the objection is to specific items of expenditure by the assignee in respect to the management of the estaté itself. In the Matter of Mather it was sought to charge the assignee for culpable negligence in failing to bring actions to set aside judgments under executions upon which goods of the assignors were sold after the assignment, but which executions were levied prior to the same; and the court held that a simple general objection against such an item was insufficient, because it did not call the assignee’s attention to the fact that he was charged with culpable neglect in failing to bring actions to set aside judgments.

In the case at bar the items objected to are not of this character. They are to the commissions which the assignee charges, his counsel fees, and the disbursements which he claims to have made in the administration of the estate, and when these items were objected to he knew perfectly the ground of the objection.

It is further urged that if it should be held that sufficient objections were duly filed to the account of such assignee, the plaintiffs did not assume or discharge the burden of establishing the validity of the objection. And the astounding proposition is advanced that the affirmative of establishing the validity of objections rests with the party making the same, and it must be made to appear beyond peradventure, the assignee having the right to demand that his accounts be declared correct, until the contrary is fairly and clearly established, citing Kelly on Insolvent Assignments (119). With such a rule an assignee has a protection which is denied to any other person, without any exception, before our courts. The guilt of a person charged with a capital crime it is not necessary to establish beyond peradventure. The degree of proof to establish such guilt must simply be beyond reasonable doubt, and no further. It is not necessary to combat so remarkable a proposition.

Attention is also called in support of the claim of the appellant to the Matter of Frazer, 92 N. Y. 239, which was an accounting of an executor, where it was held that where the executor had paid a claim based upon an,alleged contract with the deceased, which was presented and sworn to in the ordinary manner, the burden was upon the contestant to show that it was not a just debt, and in the absence of such evidence it was properly allowed —a case entirely different from the one at bar. Another question would have been presented if the objection had been to disbursements made by the executor for counsel fees and expenses in the management of the estate.

We think, therefore, that the objections were sufficiently specific to call upon the assignee to show the propriety of the disbursements made by him in reference to the management of the estate, and that the conclusions of the referee upon this point were correct without further discussion.

As to the commissions of the assignee, it seems to be impossible to imagine upon what ground such commissions ■ could be claimed. The assignee having become wrongfully in possession of property which should have been applied to the payment of the debts of the assignors instead of being placed in his hands, even though it may be without any wrong of his own, certainly cannot be allowed to deplete the estate by the charging of commissions which are the compensation for the performance of the trust, and which he has not performed or earned, to the prejudice of the creditors who have successfully assailed the assignment. It is not a question as to whether the assignor has acted prudently and in good faith and according to the best light a man of ordinary prudence could obtain under the circumstances. ,But he is denied the right to deplete this fund, because he has been fraudulently placed in possession thereof, to the detriment of the creditors who have unearthed and disclosed the fraud. It may be unfortunate that an assignee is, under the circumstances, deprived of the compensation he expected to receive. But when-he accepts a trust of this kind, he takes it cum onere. He must run the risk of the good faith of his assignors in transferring the property to him. The creditors certainly cannot be called upon to pay the assignor’s commissions on a fund which actually belongs to them, but where an assignee has in good faith executed his trust or has partially distributed the funds received by him according to the directions of the assignment, before the commencement of the creditors’ action, a different question may arise.

In respect to the counsel fees and the necessary disbursements-in protecting the fund, although there is a contrariety of decisions as to whether, in the case of an assignment being set aside, they should be allowed, it seems to us that where the assignee is not a party to the fraud and is not cognizant of the facts which make it reasonably certain that such assignment cannot stand against the attacks of creditors, his duty requires that he should resist such attacks ; and in order that he may successfully do so it is necessary that he should employ counsel. And disbursements of this class come within the class allowed to an assignee who is even cognizant of the fraud, for the preservation of the estate. The rules governing the disbursements of an assignee in an assignment for the benefit of creditors differ in no respect from those of any other trustee. The trustee, in defense of the trust committed to his care, has always been allowed out of the fund the reasonable counsel fees in protecting the estate, although he may have been unsuccessful, provided he acts in good faith, andas a reasonable and prudent man would do under the circumstances. We think, therefore, that there being no evidence that the assignee was a party to or cognizant of the frauds for which the assignment was set aside, he was entitled to recover, as part of his disbursements for the preservation of the estate, the reasonable fees which it was necessary for him to pay in order to protect the estate and the trust, and also such incidental disbursements in connection therewith as he could show to have been necessary.

The order appealed from should therefore, be so far reversed, and the question as to the allowance to be made to the assignee for his reasonable and necessary disbursements, including counsel fees, in the protection of the assignment, referred to the same referee, with costs of appeal to the appellant, and costs of a new reference to be paid out of the estate. •

Parker, J., concurs.

O’Brien, J.

(concurring). The court, at special term, confirmed the report of the referee on a reference to pass the account of the defendant, Thacher, as assignee under an assignment for the benefit of creditors. In an action brought by plaintiffs in their own behalf only, the assignment and certain confessed judgments were set aside on the ground that they created preferences of more than one-third of the assignor’s estate, in violation of chapter 503 of the Laws of 1887. Similar decrees in eleven other actions were entered, which would more than exhaust the property in the hands of the assignee, and which, by the terms of the decrees, after an accounting, were to be turned over to a receiver.

This appeal, as now presented, and that of Heywood v. Kingman, 29 Abb. N. C., 75, are clearly distinguishable. Here specific objections were filed and additional exceptions taken to the assignee’s account by the counsel for the successful judgment creditors. Moreover, there are now a number of judgment creditorts who are interested in the proper accounting by the assignee, and who have the right to and did take exception to the assignee’s account, and whose claims will exceed all that has been realized by the assignee. Having been successful in setting aside the assignment, they can question the conduct of the assignee in the management of the assigned estate.

With respect to sums paid to stenographers, typewriters and other clerks and employees of the assignee, as the referee upon the evidence held that they were legally indefensible, they were properly disallowed.

The only questions which seem to us to require any comment or discussion relate to the refusal of the referee to allow the assignee his commissions and sums paid to counsel in defending the assignment against the attacks of hostile creditors.

Smith v. Wise, 132 N. Y., 172; 43 St. Rep. 719, is authority for the proposition that in an action to set aside a general assignment, wherein it was proved and found that there was actual fraud on the part of the assignor and assignee, counsel fees and disbursments in defending the action were not allowable because they were made as stated “In furtherance of the fraudulent scheme.” And in Dexter v. Adler, 1 N. Y. Supp. 684 ; it was,held at special term that where the assignment was set aside for fraud, participated in or not by the assignee, there no commissions could be allowed. In Mayer v. Hazard, 49 Hun, 222; 17 St. Rep. 26, it was held that the assignee for creditors should not be' allowed for the expense of resisting a successful suit to set aside the assignment.

We regard it, therefore, as settled law that legal services, commissions nor disbursements will be allowed in a case where the assignment is set aside for actual fraud of the assignor, in which the assignee participated. Where, however, the assignee has not been guilty of fraud, but has acted in good faith, and where the assignment itself is not void, but merely voidable at the instance of a creditor who successfully assails it for acts of the assigdor, it has not been decided by the court of appeals that necessary disbursements incurred by the assignee in good faith, including sums paid for counsel fees in defending the trust estate should not be allowed.

Mayer v. Hazard and Dexter v. Adler (supra) are seeming authorities against such allowance, but, as the soundness of the doctrine held in those cases has been often questioned, it remains to be determined whether or not they should be further extended and followed.

In considering the questions, therefore, we think a distinction is to be made between the right of an assignee to commissions, and the right to' necessary disbursements, including the payment of fees to counsel in defending unsuccessfully the assignment.

As to the commissions, these should not be allowed, for the reason that, as they are predicated upon the discharge by the assignee of bis duties, they cannot be considered as having been earned in a case where the estate had not been administered, and where the administration of the property has been taken from the assignee and placed in the hands of a receiver. We are clear a commission of five per cent., which is the compensation fixed by statute, should not be awarded to an assignee, who has noi been called upon to discharge his duties; nor do we think that, the court is required to make any allowance, by way of compensation, less than the statutory commissions, because, in respect tt. both commissions and allowance, it may be said that the assignee, having come wrongfully into possession of the property, which should have been applied to the payment of the debts of the assignors, instead of being placed in his hands, even though it may be without any wrong of his own,should not be allowed to deplete the estate by the charging of commissions, to the prejudice of creditors who have obtained a lien by commencing their action, and in such suit have successfully assailed the assignment. Where, however, the assignee has proceeded in good faith to discharge his duties and administer the estate, and has converted the property and distributed it before the creditors’ suit is commenced, then an entirely different question would be presented, and it may be that commissions at the statutory rate or an allowance should be made to the assignee. As correctly said by the presiding justice: ‘‘It is not a question as to wheth■er the assignee has acted prudently and in good faith and according to the best light a man of ordinary prudence could obtain under the circumstances. But he is denied the right to deplete a fund of which he has been fraudulently put in possession, to the detriment of creditors who have unearthed and disclosed the fraud. It may be unfortunate that an assignee is, under these circumstances, deprived of the compensation he expected to receive. But when he accepts a trust of this kind he takes it cum onere. He necessarily runs the risk of the good faith of his assignors in transferring the property to him, and the creditors should not be called upon to pay for the services of an assignee in endeavoring to prevent them from obtaining that which they were entitled to receive, and which, but for the intervention of the assignee, they could have taken in satisfaction of their claims.”

Upon the question of necessary disbursements, including a reasonable sum to counsel in advising the assignee and in defending the assigned property from the attacks of hostile creditors, other considerations favorable to the assignee’s right to reimbursement seem to us to be present and to be supported both by reason and authority. '

' In Noyes v. Blakeman, 3 Sandf. 531, 543, it was said: “The law is most clearly settled, and it would be a reproach to its principles or its ministration were it otherwise, that all the necessary expenses of a trustee, that is, all expenses of every kind which are reasonable and in good faith incurred by him for the defense, protection or reparation of the estate, are to be treated in equity as a charge in all cases.”

And in the Matter of the Atty. Gen. v. N. A. Life Ins. Co., 91 N. Y. 57, it was said: “The principle upon which counsel fees are granted in such instances is that of necessary disbursements, and it stands upon the same ground as any other necessary expense for the preservation of the fund. Often and usually the trustees has no interest outside of the performance of duty. What he does is for the benefit of others, whose interests are for the time being in his keeping. He owes them no duty to expend his own money for their benefit, and whatever he does so «expend in the reasonable and prudent care of the trust fund is properly allowed to him as an expense.”

In Downing v. Marshall, 37 N. Y. 380, 389, it was said : “His (the trustee’s) duties relate to the property and interests of others, and he is to be indemnified for necessary expenses in protecting such trust property, and has an equitable lien upon it for such expenses.”

As said in the supplement to Bishop on Insolvent Debtors, 2d ed. p. 55 : “The general rule being thus unquestioned, the inquiry is whether it included expenses of litigations unsuccessfully undertaken or defended by the assignee without practical benefit to the estate, assuming them to have been incurred in good faith and with the prudence which an intelligent and careful man would show in his own affairs. A rule which would preclude a trustee from such allowances would certainly be a severe one. It would require of him an infallibility of judgment which we do not expect in the highest judicial tribunals, where opinions are sometimes conflicting. It is suggested in Mayer v. Hazard, supra, that an assignee may protect himself against loss by calling upon the creditors to indemnify him before he proceeds with litigation. It is doubtful whether this is a practical protection to the assignee.”

The logical conclusion from Mayer v. Hazard is that an assignment which, on its face, is perfectly valid, and, so far as the assignee is concerned, was executed in good faith, is to be surrendered by the latter to the first or any attack made upon it, or else protected at his own risk and expense. If, however, the assignee should be unwilling at his own risk and expense to-defend the assignment, and should fail to receive indemnity from friendly creditors, there are cases which might be cited as seeming authority for the view that he would be responsible for neglect of duty in permitting the trust estate, without action on his part, to be wrested from his possession. We do not think an assignee or trustee should be placed in such a dilemma, nor do-we think the law places him in any such position of risk.

We see no good reason, therefore, either in principle or upon authority, why an assignee, who himself has been guilty of no-fraud, and who undertakes to discharge the duties of a trustee-under an assignment which is not void, should not be allowed such proper and necessary disbursements as he in good faith may have made, either in collecting, protecting or defending the trust property.

The judgments confessed were more than one-third of the property of the assignors, and, under the rule held in the earlier-cases, an attempt to give an unlawful preference in excess of the statutory limitation of one-third was held to be fraudulent. Here, therefore, the judgment creditors succeeded upon this ground, and no appeal having been taken from such judgment it is conclusive. It is proper, however, in this connection to recall the fact that the earlier cases have all been overruled by that of the Central National Bank v. Seligman, 138 N. Y. 435; 53 St. Rep. 14, which decided that confessed judgments in excess of the one-third allowed by law do not operate to make the assignment for the benefit of creditors void as fraudulent, but that such judgments are to be considered as preferences, and, if in excess of the legal proportion of the assignors’s estate, are to-be reduced to a lawful amount.

Here, the assignee not having been a party to the fraud alleged as the ground for the creditors’ successful attack, and the testimony showing that he acted in entire good faith, without knowledge of the prior confessions of judgment until after the attack upon the assignment was made, and in the light of the' decision in Central National Bank v. Seligman, supra, we think that reasonable disbursements made and sum paid to 'counsel for defending the assignment should be allowed.

Our conclusion, therefore, is that the report should in all respects be confirmed, except as to the disallowances of necessary disbursements made by the assignee or sums by him paid to counsel in defending the assignment, and that the question of the amount of such allowance should be referred to the same referee for decision, with costs of the appeal to appellant, and cost of reference to be paid out of the estate.


source: Caselaw Access Project

author: Van Brunt, P. J.

license: Public Domain

text:
    Caroline A. McCready et al., Resp’ts, v. The Manhattan Elevated Railway Company et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed March, 1894.)

    1. Damages—Elevated bailway.

      A. decrease in rents, which has occurred long after the road was built and in operation, cannot be attributed to it.
    2. Same.
    A cause, existing for ten or twelve years, cannot, without some change in its conditions, evolve additional damages.
    Appeal from judgment entered after trial at special term.

      Davies, Short & Townsend (.Arthur G. Townsend, of counsel) for app’lts; W. P. Prentice, for resp’ts.
   Van Brunt, P. J.

This action was brought to recover past damages and fee damage caused by the appropriation of the easements appurtenant to the premises on the northwest corner of' Ninth avenue and Fifty-third street, by the defendants, for their elevated railway.

The questions presented are as to the excessive amount of damage allowed; and as to the error of the court in its finding. The court found that the maintenance, use and operation by the defendants of their elevated railway structure and the additions thereto, including the switch tower and track-house and planking between the tracks for the convenience of the defendant’s employees, and the third and extra set of ties over the avenue in front of plaintiff’s premises, and the passage of numerous and frequent trains over such elevated structure constituted an inconsistent and excessive street use and trespass upon the plaintiffs’ easements and rights of property for which the plaintiffs are entitled to damage.

In making this finding it seems to us that the learned court erred. The existence of all the elements recited in the finding does not absolutely entitle the plaintiff in cases of this description to damages. Other elements must be proved, as has been established by repeated decisions of the court of last resort, and that notwithstanding the existence of all the elements mentioned, a party may not be entitled to damage. In this statement the question of benefits seems to have been entirely lost sight of. It is true that in other parts of the conclusion of law the court found that the plaintiffs are not entitled to injunctive relief, unless they have proved that the interference with the easements appurtenant to the premises in suit resulted in substantial pecuniary damage to the same, and that the actual market value of the premises would be greater if the defendant’s railroad in front thereof had not been built; and that the plaintiffs are not entitled to recover damages in this action except to the extent, if any, by which the disadvantages of the defendant’s road have exceeded the advantages thereof to said premises. But in view of the award which has been made in this case, it would seem that the first proposition. found was the one upon which the court below acted. Prior to the year 1888 the premises had virtually been vacant, being used as a coal yard. There is no clainrthat their rental value for such purpose was affected by the presence of the elevated railroad. The apartment house and stores which were upon the premises .at the time of the trial appear to have béen built about 1888, and the premises were bought by the plaintiff in 1889, eleven or twelve years after the elevated railroad had been in operation, and the tracks in substantially the same condition as they were at the time of the trial. And yet it has been found by the court that between 1889 and 1893 the rents of the premises in question have ■decreased in consequence of the maintenance and operation of the elevated railroad. We are unable to see how it is possible that to conditions existing in substantially the same state can be ascribed a fall in the rents of the premises in question. In fact, it would rather appear that the fall arose from the fact that too high rents were demanded by the plaintiffs on their purchase, and when they had to take less, it was claimed that the rents had fallen. And that such was the case is evidenced by the testimony of the witness, Hughes, who was in charge of the' premises in question.

As already intimated, we cannot understand how a decrease in rents, which has occurred long before the elevated railroad has been built and in operation, can be attributed to it. Such decrease must necessarily arise from other conditions not from those which have been in existence years before.

We think this is the difficulty which has pervaded the conclusion of the learned judge throughout the whole of this case, and that the fee damage has been largely augmented by , a supposed ■decrease in rents, arising from the operation of the elevated railroad, when such decrease must necessarily be ascribed to some ■other cause, for the reason that a cause existing for ten or twelve years, cannot, without some change in its conditions, evolve additional damages.

We think, therefore, that error was committed which has pervaded this judgment upon this subject, and which call for its reversal.

The judgment should be reversed and a new trial ordered, with ■costs to the appellants, to abide the event

O’Brien and Follett, JJ., concur.


text:
    Greenwich Insurance Company, Resp’t, v. Oregon Improvement Company, App’lt.

      (Supreme Court, General Term, First Department,

      Filed February, 1894.)

    1. Payment—Check.
    The check of a debtor’s agent is not payment of a precedent debt, unless it is paid or expressly taken in entire or part satisfaction of the debt.
    2. Same—Burden.
    The burden is upon the debtor to establish such agreement.
    S. Same—Receipt.
    A receipt by the creditor for the amount of the check adds nothing to the effect of its delivery to him.

      4. Same—Delay.
    The creditor’s delay in depositing the check does not make it payment, unless such delay caused loss to the debtor.
    Appeal from judgment on the verdict of a jury rendered by direction of the court at circuit.

      A. H. Holmes, for app’lt; M B. Bobinson, for resp’t
   Van Brunt, P. J.

This action was brought to recover from the defendants a pro rata or earned portion of a policy of insurance issued by the plaintiff.

The complaint alleged that the insurance was made at the request and for the benefit and advantage of the defendants, and that the policy was continued in force until about the 12th of March, 1891,, when it was cancelled at the request of the defendants, pursuant to the terms thereof, and that the pro rata or earned premium, up to the date of the cancellation of said policy, was the sum of $1,503.76, and that the defendants promised and agreed to pay said sum.

The defendants in their answer admit the issuance of the policy, and that it was issued at the request of and for the benefit of the defendants, and that it continued in force as alleged in the complaint, when it was cancelled at the request of the defendants; they also admit the pro rata earned portion of the premium was the sum of $1,503.76, which sum defendants promised to pay; but they deny that payment had been demanded, or that they or any of them neglected or refused to pay the same or any part thereof; and deny that said sum or any part thereof was due and owing. They also deny each and every allegation contained in the complaint not expressly admitted. And they further allege that, before the commencement of this action, the defendants paid to the plaintiff the sum of $1,503.76, in full payment of said claim or demand in said complaint set forth.

Upon the trial it appeared that said plaintiff and defendants never had any transactions directly with each other, but they were all conducted through a firm of insurance brokers by the name of Satterlee, Bostwick and Martin; and that the plaintiff delivered the policies issued upon the defendants’ property to Satterlee & Co., and the defendants paid the premium upon said policies to said Satterlee & Co., who, after deducting their commission, paid over the same to the insurance company, excepting in the instance out of which this action arose. It further appeared that, shortly after the issuing of the policy in question, Satterlee & Co. made application to the defendants for the sum required to enable them to pay the premium thereon, together with the premium on another policy obtained by them for the defendants in another insurance company ; and the defendants, thereupon, on the 13th of February, 1891, furnished Satterlee & Co. with the amount required to settle said account, and took their receipt in full. Satterlee & Co. did not, however, pay the premium on the policy, and on the 20th of March, 1891, when the policy in question was cancelled, at the request of the defendants, the pro rata or earned portion of said premium due to the plaintiffs was $1,503.76, which the defendants promised and agreed to pay, as admitted in their answer. On the 28th of March, 1891, the plaintiff sent Satterlee & Co. a notice for the payment of this premium, and also that of another policy issued, upon the the 20th of March, 1891, but the same was not paid. On the 4th of May, the treasurer of the defendant, the Oregon Improvement Co., went to see the president of the plaintiff, who informed him that the premium on the plaintiff’s policy had not been paid. The treasurer returned to the plaintiff’s office with Satterlee in whose presence the president of the plaintiff again stated that the premium had not been paid ; whereupon the treasurer stated that the defendant had paid it on the 18th of February to Satterlee & Co.

At this interview Satterlee promised that his firm would send a check, which was to be held for a few days. On the 5th of May the defendant’s attorneys wrote a letter to Satterlee & Co., notifying them to produce at once to the defendant, satisfactory proof of payment of such premiums to the insurance company, or forthwith to repay said moneys to the Oregon Improvement Company. On the same day Satterlee & Co. sent to the plaintiff their check on the-Chemical Bank, dated the 7th of May, to its order, for the sum of §6,410.75 ; this check covering the original premium on the policy in question before cancellation, less the broker’s commission of ten per cent., if the check was paid, to a credit in account with the plaintiff of §7,123.05. The amount thus paid was not adequate to-meet the indebtedness due the plaintiff for the earned premium on the policy mentioned in the complaint, and the full premium on the policy issued on the date of the cancellation of the policy mentioned in the complaint, but was simply the amount received by the brokers on February 13th, less their commissions. The check was receipted for on the receipt book of Satterlee & Co., by the plaintiff. Its receipt was also entered in the delivery book of the company. On the afternoon of May 5 th, the assistant secretary of the defendant called upon the'plaintiff to ascertain whether the premiums had been paid by Satterlee & Co. The president of the plaintiff showed the defendant’s agent the check, and called his. attention to the fact that it was dated the 7th, and that they should consider it payment only if it was honored by the bank. The-check was deposited in the bank on the 11th of May, and not paid. From the giving of the check until the 12th of May, Satterlee & Co. had no sufficient funds to meet the same in the bank.

On the 9th of May the plaintiff wrote to the defendants, calling their attention to the fact that they had been requested to hold from day to day the check given in payment of the premiums, and notifying them that the premiums were not paid, and that they should look to defendants for their payment. On the 11th the defendants wrote to the plaintiff, in reply, to the effect that they had paid the money to the brokers on the 13th of February; and that the plaintiff, on the 4th of May, was notified of such payment; and that on the 5th of May, they were informed by the officers of the plaintiff that they had received a check of the brokers for the amount of the premiums, less their commissions, and that, under the circumstances, they were advised that the plaintiffs could not properly look to them for payment thereof, having accepted Satterlee & Co.’s check and their obligation in payment of the original obligations of the defendants therefor. On the same day the plaintiff wrote to the defendants, in answer to their letter, that their messenger who called at the plaintiff’s office regarding the alleged payment by the brokers was informed that they had received the ■check from the brokers for the premium, and his attention was called to the fact that it was dated ahead, and that they should only consider the premiums paid when the check was honored, and, furthermore, that they should look to the assured, under the policy. for payment in the event of the failure of the brokers to make their check good.

It was claimed upon the trial that Satterlee & Co. were the agents of the plaintiff to receive the payment of the premium from the defendants, and that, even if they were not, the plaintiff accepted the check of Satterlee & Co. as payment of the premium on the part of the defendants. These propositions were repeated in different forms, but they were decided against the defendants by the court, who refused to allow defendants to go to the jury upon any such issues, and directed a verdict in favor of the plaintiff, and from the judgment thereupon entered this appeal is taken.

It is difficult to see how, under the pleadings, it can be claimed that the payment of the 13th of February, 1891, to Satterlee & Co. was a payment to them as the agents of the plaintiff, because the answer admits the surrender of the policy in question on the 20th of March, 1891, and that the pro rata or earned premium on said policy up to the date of its cancellation, was the sum of $1, ■503.79, which they promised and agreed to pay. Now, if the had already, on the 13th of February 1891, paid the full premium on this policy, as was claimed on the-trial, how could it be possible that they could owe $1,503.76 upon such policy upon its surrender before maturity for pro rata or earned premium ? The admission in the pleadings is entirely inconsistent with any such view. But, •even if that were not so, it is apparent from the tenor of a the letter ■of May 11th by the defendants to the plaintiff, when they were notified of the condition of affairs in reference to this non-payment of the check of Satterlee & Co. that they did not consider that the payment to Satterlee & Co. of the 13th of February had can-celled any indebtedness of theirs to the plaintiff, because they say; “ On May 4th you were fully notified of such payments (referring to the payment of February 13th) and on May 5th made inquiries of Messrs. Satterlee, Bostwick and Martin, and having been informed by them that they had paid the premiums on the same date, the 5th inst., but after said statement by Satterlee, Bostwick and Martin, we sent to your office and were informed by your officers that they had received a check from Messrs. Satterlee, Bostwick and Martin for the amount of the premiums less amount of their commission. Under these circumstances, we are advised that you cannot properly look to this company for the payment of the premiums referred to, you having accepted Satterlee, Bostwick and Martin’s check, and. their obligations in payment of the original of this company therefor.”

Here is no pretence that there was any satisfaction of the-indebtedness to the plaintiff on account of this transaction prior to the 5th of May, when it alleged the plaintiff accepted Satterlee’s check in cancellation of that obligation. It was not the payment-to Satterlee & Co. which was then claimed to have cancelled the indebtedness, but the fact that they had accepted the check of a. third party in cancellation of the indebtedness. And this undoubtedly was the position which the defendants took ; and it was not until the failure of Satterlee & Co., and they began to think of the relations existing between them, Satterlee & Co. • and the plaintiff, that the idea dawned upon them that payment to Satterlee & Co. liquidated their indebtedness to the insurance company. But it is needless to discuss this proposition, in view of the condition of the pleadings as already suggested.

The only question which was open to discussion, in view of the-issues raised by the pleadings, was the question whether the indebtedness had been discharged by the acceptance of the check of Satterlee & Co.

There is no evidence that there was any agreement that, this check should be taken in absolute satisfaction of the debt. The messenger of the defendants first called upon the platinti£E in regard to this matter to learn whether the premium had been paid. This action was entirely inconsistent with the idea that the payment to Satterlee & Co. had satisfied their obligation. When they learned that it had not, they brought Mr. Satterlee to the plaintiff, and he promised to give his check. But there is no evidence that, upon the giving of that check, the plaintiffs agreed to take it in full satisfaction of the debt. In fact it is difficult to see how they could have made any such agreement, because they knew of the embarrassment of Satterlee & Co. The check was to be post-dated and they were to wait for its payment. The defendants were notified of these facts and it is impossible to spell out such an agreement as would discharge them from their obligations.

The rule as laid down is that, in the absence of an agreement to take the security in absolute satisfaction of the debt, the intendment of law is that it is a conditional payment only, namely, that, if the check is paid, the debt will be discharged; otherwise not. This proposition is distinctly laid down in the case of Carroll v. Sweet, 128 N. Y. 17; 37 St. Rep. 868, and cases there cited. There-is no room for inferences. The agreement must be proved. If any inferences are to be drawn from silence or want of evidence, it is in favor of conditional payment. The giving of a receipt for the money as presented by this check in Satterlee & Co.’s receipt book in no way changed the aspect of the transaction. The money was not received, and such entry was only an acknowledgment of the receipt of the check. It' discharged nothing, and in no way changed-the relation of the parties It would seem, therefore, that the defendants failed to present sufficient proof to-justify a submission to the jury on the question of payment.

There was a claim made that the plaintiffs were negligent in their attempts to collect the check in not having deposited it, and that, therefore, the defendants were discharged. But the defendants. were not endorsers upon the check; and if the plaintiffs were guilty of negligence in respect to its collection, in order that the defendants should be discharged by reason thereof it must be shown that they were damaged thereby. It appears that, in any event, it would not have been paid, because there were no funds to meet it.

Upon the whole case we see no error in the conclusion arrived at by the court below, and the judgment appealed from should be affirmed, with costs.

O’Brien and Parker, JJ., concur.


author: Pryor, J.

text:
    Rebecca Shapiro, an Infant, by her Guardian ad litem, Pl’ff, v. Michael F. Burns et al., Def’ts.

      (New York Common Pleas, Special Term,

      Filed February, 1894.)

    1. Leave to Sue—Poor Person.
    A motion for leave to sue as a poor person may be made after action brought and any time during its pendency.
    2. Same—Security for costs.
    Such application is not barred by an order to file security for costs.
    3. Same—Defense.
    The wealth of the guardian ad litem, though father of the plaintiff, is no answer to the motion.
    4. Same—Discretion.
    Upon compliance with the prescribed conditions, such right is not dependent upon judicial discretion.
    The opinion states the case.

      Charles M, Koplih, for pl’ff; Wm. S. Cogswell, for def’ts,.
   Pryor, J.

Before action was brought, a guardian ad litem was appointed for the infant plaintiff; after action commenced, an , order was made requiring plaintiff to furnish security for costs; but instead plaintiff now moves for leave to prosecute the suit in forma pauperis.

It is plain upon the terms of the statute (§§ 458 and 459, Code of Civil Procedure) that an infant may be allowed the privilege of suing as a poor person, and that application for the privilege may be made after the commencement of the action. From the reason of the thing, leave to prosecute in forma pauperis must be accorded before or during the pendency of the action ; but otherwise no limitation of time is prescribed for the application.

The defendant objects that the court has directed the plaintiff give security for costs, but the motion involves a vacatur of the ' order for security ; and, the order out of the way, that permission to prosecute the action as a poor person may be now conceded, is plainly the option of the Court of Appeals, Sherman v. Pope, 106 N. Y. 664; 8 St. Rep. 710. Were it not so, then, as here, a defendant might, within two days after suit brought, preclude the plaintiff from the right of prosecuting in forma pauperis—a right as already seen, open to him at any time during the pendency of the action.

It is still insisted that, because the guardian ad litem is father of the plaintiff and a man of means, the plaintiff should not be suffered to prosecute as a poor person. But the wealth of the father is not the wealth of his child; nor will the product of the suit, if successful, inure to the benefit of the father. The Code is explicit, that it is the poverty of the plaintiff, not of the guardian ad litem, that confers the privilege of suing as a poor person. Besides, § 469 of the Code, by requiring a “responsible person” to be guardian ad litem, and rule 49, by exacting that the guardian shall be of “sufficient ability to answer to the infant” for misconduct of the trust, demonstrate that the possession of means by the guardian is no bar to the plaintiff’s application to sue as a pauper.

It is urged, however, and urged with force, that if the order be granted, then the plaintiff cannot possibly lose nor the defendant possibly gain by the event of the litigation, and that yet, without the least hazard on her part, the plaintiff may recover $5,000 of the defendant This game of “heads I win and tails you lose” in ■a lawsuit, was not possible in our jurisprudence until 1891, when, for the first time, the liability in costs of a guardian ad iitem for a poor person was abolished. This disparity of advantage between the parties in an action may" not be thought to consist with justice, but ita lex scrvpta esi, and I must apply the law as it is given to me.

It is argued, however, that the unequal operation of the statute appeals to the judicial discretion against the allowance of the order. Is it discretionary with the court to accord or refuse to a plaintiff the liberty of suing as a poor person when he conforms to the prescribed conditions? True the language of the Code is that “the court may admit him to prosecute as a poor person but it is the settled rule of construction that-when by permissive words power is conferred on an officer for the benefit of the public or third persons “may” means “must,” and power is the equivalent of duty. 14 Am. & Eng. Encyl. of Law, pp. 979-981.

That, upon compliance with the statutory conditions, one has a right to sue as a poor person is apparent from the nature of the case and all the provisions of the law on the subject.

Upon principle judicial discretion is an anomaly in free government, and from its liability to abuse should be tolerated with the least possible latitude in operation. The state says all persons in a particular category may have access to its courts without expense; and for me to repel any one of the class upon my estimate of his desert would, I conceive, be inconsistent with the mandate of the law, and a precedent fraught with possibilities of arbitrary and unjust discrimination.

If the legislature had intended to repose the power in the discretion of the judge it would have said so in terms, as it did in conferring authority to revoke the leave to sue in forma pauperis. Code, § 462.

If, however, I have a discretion, I exercise it in favor of the plaintiff.

Motion granted; no costs.


author: Follett, J. Van Brunt, P. J. ,

text:
    Charles S. Murphy, App’lt, v. William C. Jack et al., Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed February, 1894.)

      1. Attachment—Affidavit.
    An affidavit by agent or attorney that the facts, required to be shown by | 636 of Code, exists, as he is informed and believes, stating source of information and ground of belief, is sufficient to confer jurisdiction to grant an attachment.
    '2. Same—Means of communication.
    Such information may be derived from conversation through a long distance telephone.
    -8. Same—Excuse for attorney.
    The belief that defendant’s attachable property would be removed from the state before an affidavit could be obtained from the plaintiff, who was without the state, is sufficient excuse for presenting the attorney’s, instead ■of the party’s, affidavit.
    Appeal from an order granting a motion to vacate an attachment made on the papers on which the writ was granted.
    It is alleged in the verified complaint that the defendants purchased goods of the plaintiff and agreed to pay therefor $1,354.80, July 20, 1893, but have not paid the same nor any part thereof. The complaint was verified by one of the plaintiff’s attorneys, for the reason, as stated in the verification, that the plaintiff was not then in this state, but in the state of Massachusetts. It is ■averred, on information and belief in the affidavit, that the plaintiff is entitled to recover $1,354.80, with interest from July 20, 1893, over and above all counterclaims known to the plaintiff, •and that the plaintiff is a resident of Boston, Massachusetts, and that the defendants reside at Gardiner, Maine.
    • The affidavit is made by one of the attorneys of the plaintiff, who states that he acquired his information on the day of. the date of the affidavit from the plaintiff by a conversation carried -on with him by means of a telephone, the affiant being in New York and the plaintiff in Boston. The following reason is given why the affidavit is not made by the plaintiff:
    “ Deponent asks that an attachment may be granted without waiting for affidavits to be obtained from Boston, for the reason that it is possible, as deponent is informed and believes, to attach property to-day in New York city, belonging to the defendants, but that it would be likely to be removed and lost if a day’s delay were required.”
    The complaint and affidavit were verified August 2, 1893, and a sufficient undertaking was given, and an attachment was granted on the same day by a judge of this court, which was vacated on the papers on which it was granted by a special term held by another judge of this court.

      Sullivan & Cromwell, for app’lt; Henry D. Hotchkiss, for resp’ts.
   Follett, J.

The right to attach property to secure the payment of a debt before recovering a against the alleged debtor is not a common law right, but in .this, as in most of the states, it exists by virtue of statutes, the requirements of which and the procedure prescribed by them, must be substantially complied with by the attaching creditor in order to acquire a valid lien on the debtor’s property. Our Code requires the plaintiff “ to. show by affidavit to the satisfaction of the judge granting the same ” (attachment) the necessary facts. The Code does not require that the affidavit shall be made by the plaintiff, nor by any one having personal knowledge of the existence of the facts stated in the affidavit, but an affidavit made by the agent, or by the attorney of the attaching creditor, averring that the facts required to be shown by § 636 of the Code exist, as the affiant is informed and believes, stating the source of his information and the grounds of his belief, is sufficient to confer jurisdiction on a judge to grant an attachment. Buell v. Van Camp, 119 N. Y. 160; 28 St. Rep. 947; Bennett v. Edwards, 27 Hun, 352 ; Crowns v. Vail, 51 id. 204; 21 St. Rep. 208; Kokoma Strawboard Co. v. Inman, 53 Hun, 39 ; 24 St. Rep. 663: Globe Yarn Mills v. Bilbrough, 2 Misc. 100 ; 49 St. Rep. 702 ; Reichenbach v. Spethman, 5 Mon. L. Bull. 42.

In the case at bar the existence of the facts necessary to confer jurisdiction on the judge having been shown by affidavit, the question is ought the judge to have been satisfied by the evidence presented? When courts and judicial officers are asked to act upon affidavits made on information and belief, they require as a matter of safety, that the source of the information and the means by which it was communicated be disclosed. If the source of information be a person, it must be one whom the court can see probably had personal knowledge of the facts communicated, and the means by which the communication is made must be one which experience has shown to be usually reliable, and one which a prudent man would employ in a matter of importance to himself.

The source of information in this case was the plaintiff, the person of all others most likely to have personal knowledge of the existence of the debt, its amount and the residence of the debtors. The source of the affiant’s information is the best, and, indeed, it was not questioned by the learned judge at special term, nor is it by the learned counsel for the respondents, except it is suggested that some of the information was communicated by the plaintiff’s attorney in Boston, but it is specifically stated in the affidavit that all of the jurisdictional facts were communicated by the plaintiff. But it is said that the means by which the affiant acquired his information is not sufficiently reliable to authorize or support judicial action. The means through which the affiant derived his information was a conversation by a long-distance telephone, the plaintiff being in Boston and the affiant in New York.

It has been held that an attachment may be based upon facts reported to the affiant by means of a cablegram. Reichenbach v. Spethman, supra. In the case last cited an attachment was granted and sustained on information cabled from Europe to the affiant in New York. Certainly, the means would not have been less reliable had the sender and receiver of the cablegram been communicated with each other bjr telegraph and had done so. There was certainly no greater chance for error in communicating the information received by the affiant, in the case at bar, in the manner in which it was communicated, between persons interested in arriving at the exact facts, than there would have been in a communication transmitted either by telegraph or telephone, and written out and delivered in the ordinary way.

We do not think that it will do to hold that judicial action cannot be based on information transmitted by telephone, unless as it is suggested, the affiant swears that he knew and recognized the voice of the person with whom he communicated. Such identification is impossible in telegraphic communication, and the precaution of repeating dispatches would afford no greater security against deception than the opportunity of personal inquiry and cross examination over the telephone. There can be no absolute rule by which the sufficiency of evidence to sustain attachments can be determined, and every case must depend largely upon its own facts and somewhat upon the nature of the action. In the case at bar the case of action is a liquidated demand arising on the sale of goods. The ground for the attachment is that defendants are non-residents of the state, two simple facts, which, as, between the creditor and debtors, we think were established prima facie by the complaint and affidavit used on granting the writ, and that the burden was cast on defendants, if they desired relief from the attachment, to rebut the presumption arising from those affidavits and show affirmatively either that they were not indebted or that they were not non-residents of the state.

Had the question arisen between subsequent lienors a stricter rule might be enforced, but, as between these parties, it seems to us that the plaintiff should not be deprived of his lien unless the defendants overthrow the prima fade case of the plaintiff.

The fact that the plaintiff was without the state, and that the affiant believed that the defendant’s attachable property would b© removed from, this state before an affidavit could be obtained from the plaintiff, was a sufficient excuse for presenting the affidavit of the attorney instead of that of the party.

The order should be reversed, with $10 costs and printing disbursements, and the motion denied, with $10 costs, but with leave to the defendant to make a new motion upon affidavits for an order vacating the writ.

O’Brien, J., concurs.

Van Brunt, P. J. ,

(dissenting.) I cannot concur in the conclusion of the within opinion. It proceeds upon the assumption that the attorney communicated with the plaintiff by telephone, and received from him the facts necessary to be presented to the court, upon the application for attachment. The attorney did not see the plaintiff, nor did he recognize his voice. Where, then, is there any proof that the plaintiff communicated anything ? In the case of a telegram a record is made. The original dispatch is preserved and accessible; but, in the case of communication by telephone; nothing is left to which any test can be applied by which the accuracy or authenticity of the alleged communication can be determined:


text:
    Roswell W. Keene, App’lt, v. The Tribune Association, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed March, 1894.)

    1. Appeal—Interlocutory .judgment.
    An appeal does not lie from the order directing the interlocutory judgment.
    2. Llbel—Trade or business.
    Whatever words are calculated to prejudice a man, who seeks his livelihood by any trade or business, are actionable per se."

    3. Same.
    But it is not enough that the language tends to injure the person in his office, profession or trade ; it must be spoken in relation thereto.
    The above entitled action was brought for the publication of the following alleged libelous articles in the New York Tribune of August 18 and September 6, 1884 :
    “The Diamond Company, Limited.
    “ An enticing circular has recently been sent to many business men of the city. It begins with the announcement that books for subscription to the capital stock of the Diamond Company, Limited, are opened, and the public are respectfully invited to absorb the shares, to the number of 20,000, at $100 each. The circular is signed by Roswell W. Keene, No. 280 Broadway, New York, and a written reference was made upon a copy which came to the Tribune to the American Loan and Trust Company, No. 113 Broadway. A reporter was sent to investigate the matter. Mr. Snow, who was in charge of the office of the company, upon being shown the printed circular and asked concerning it, said that some time ago he had been called upon by persons who said they spoke in behalf of the Diamond Company, Limited, and desired the institution over which Mr. Snow presides to become its financial agent. To this proposition a decided negative was given, and it was then suggested that the American Loan and Trust Company should receive the deposits of the ‘Diamond Company, Limited.’ To this Mr. Snow made response that it would be time enough to consider the matter when the deposits made their appearance at the receiving teller’s counter. Mr. Snow said further that' he never before, nor has he since, known anything of the persons of the enterprise, and ended his talk upon the matter with this summary of financial lore: 1 Moneyed institutions cannot safely indorse or recommend anything or anybody.’ He emphatically denied that the American Loan and Trust Company had in any way or to any extent become the financial sponsor of the 1 Diamond Company, Limited.’. An unsuccessful effort was then made to find Roswell W. Keene, whose office is in the Stewart Building, at Broadway and Chambers street. Mr. Keene was not in, and nobody connected with the building knew when he would be. Altogether the investigation did not result in a brilliant showing for a company of which the prospectus ‘ declares the capital stock to be $2,000,000 in 20,000 shares at $100 each,’ followed by this announcement: ‘ Subscribers are required to pay ten per cent, of the par value of each share subscribed for at the time of making such subscriptions.’ The business of the company is said to be ‘ the mining of diamonds and other precious stones, the cutting and working, the purchase and sale, the setting and the loaning of the same for the purpose of gain and profit and the cultivation of art, and the manufacture, purchase and sale of timepieces and jewelry generally.’”
    ‘•The Diamond Company, Limited.
    “ Roswell W. Keene, who is endeavoring to promote the interests of the Diamond Company, Limited, with a capital of $20,000,000, says:”
    Appeals from order of the special term directing judgment upon a demurrer, and from an interlocutory judgment dismissing the plaintiff’s complaint upon demurrer.

      R. W. Keene, app’lt in person; Henry W. Sacketi (William A. McQuaid, of counsel), for resp’t.
   Van Brunt, P. J.

The appeal from the order directing the interlocutory judgment must be dismissed, with $10 costs, there being no provision in the Code for any appeal from such an order.

The appeal from the interlocutory judgment brings up the sufficiency of the plaintiff’s complaint. It was an action to recover damages for an alleged libel. A demurrer was interposed, alleging as aground that it appeal’s upon the face of the complaint that it does not state facts sufficient to constitute a cause of action.

Two grounds in support of said demurrer are urged. They are, first, that there is nothing libelous per se in the publication complained off; and second that there is no adequate allegation of special damage.

Upon the part of the appellant it is not claimed that there is any adequate allegation of special damage, but it is claimed that such allegation is not necessary, and that the publication is libelous per se, because it refers to the plaintiff in his occupation, either as a lawyer or as a commissioner in the organizing of the corporation referred to in the article complained of.

There does not seem to be any dispute in regard to the law ; but the difference of opinion arises from the application of the well recognized rules of law to the facts alleged. There is no question but that “ Whatever words have a tendency to hurt, or bring ridicule and contempt on the plaintiff, or are calculated to prejudice a man who seeks his livelihood by any trade or business are actionable. When proved to have been spoken in relation thereto, the action is supported, and unless the defendant shows a lawful excuse, the plaintiff is entitled to recover without allegation or proof of special damage,” because both the falsity of the words and the resulting damages are presumed. Moore v. Francis, 121 N. Y. 204; 30 St. Rep. 467. But the difficulty with the plaintiff’s case is that there is nothing in the article which shows that any part of the publication was made in respect to any trade or business in which the plaintiff was engaged. Where such is the case an innuendo cannot change or enlarge the plain meaning of words; and it is not enough that the language tends to injure the person in his office, profession or trade ; but it must be proven to have been spoken in relation thereto. Moore v. Francis, supra. As was said in Kinney v. Nash, 3 N. Y. 177, it must touch him in his office, profession or trade.

A somewhat striking illustration of this rule is contained in the case of Van Tassel v. Farrington, 1 Johns. Cas., 130, where the plaintiff was a justice of the peace, and sued the defendant because the latter called him a damned rogue. The plaintiff was non-suited upon the ground that these words, although spoken of a magistrate, had no relation to his official character or conduct, and were not actionable. In the case of Van Tassel v. Capron, 1 Denio, 250, the declaration charged the speaking of the following words of the plaintiff in his character of justice of the peace: “There is a combined company here to cheat strangers, and Squire Yan Tassel has a hand in it; K. A. J. G. and Squire Yan Tassel are a set of damned blacklegs.” But the declaration did not show that the impuation was connected with the plaintiff’s official conduct, and it was held that they were not actionable.

It would therefore appear that the complaint was fatally defective, and that the judgment appealed from must be affirmed, with costs.

Follett and Parker, JJ., concur.


author: Yan Brunt, P. J.

text:
    Willard Parker et al., App’lts, v. Benjamin F. Butler, as Trustee, etc., et al., Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed February, 1894.)

    1. Will—Construction.
    The courts do not insert, in a testator’s will, clauses made necessary by a change of circumstances in his property, which have occurred subsequent to the execution of the will and for which the testator has not provided.
    2. Same.
    By the construction given to the will andcodicil, it was held that it was not the intention of the testator to charge the trust estate devised by the sixth clause of the will with the purchase price mentioned and contained, and save the general estate from any diminution by its payment.
    Appeal from judgment entered after trial at special term.

      F¡. L. Stimson, for app’lts; A. II. Joline, for Butler, trustee, etc.; W. P. Butler, for the other def’ts, resp’ts.
   Yan Brunt, P. J.

This action was brought to procure a construction of the will and codicil of Dr. Willard .Parker, who died in New York City on the 25th of April, 1884, which will and codicil were admitted to probate on the 31st of May, 1884. The will and codicil in question were executed by the testator respectively on the 5th of January, 1883, and the 11th of January, 1883.

Some time prior to the execution of the will and codicil in question, the testator and his brother, Grenville Parker, were jointly interested in a large amount of West Yirginia land. The said Grenville Parker died intestate on the 10th of May, 1881, leaving him surviving his widow, Eliza A. Parker, and his daughter, Emily T. Parker, his only child and heir at law. In July, 1881, the said Eliza A. Parker was duly appointed sole administratrix of the estate of said Grenville Parker by the courts of West Virginia, he being at his decease a resident of said state. On the 14th of February, 1882, an agreement was entered into between said Eliza A. Parker and Emily T. Parker, and Eliza A Parker, as administrator, eta, and the testator, for the sale to said testator of all the right, title, interest and estate which said Grenville Parker had owned or possessed in and to said lands for the sum of $18,000, which was to be paid out of the first moneys received by him for the sale and disposal of the lands, properties and interests described in said contract. The contract also contained a clause giving said testator the right to make payment of the consideration money without waiting for a sale of the lands as provided in said contract. The testator had also other properties in West Virginia, and a considerable estate in Hew York, Massachusetts and elsewhere.

By the general scheme of the will, the testator divided all his property into two general classes, each distinct from the other, his West Virginia property of every sort whatsoever treated in the sixth clause, and his general estate considered in the other portions of the will. The said sixth clause, so far as it is necessary to recite the same for the purpose of this opinion, is as follows:

• “ Sixth. As I am now owner of various lands, and contracts for the purchase or sale of lands, leases, mortgages, and equitable interests and rights in and to lands, situated at West Virginia, and as I may hereafter acquire other such lands in said state before my death; and as I wish to make special disposition of the same different from that which I hereafter make of my other estate. How, therefore, I hereby give, devise and bequeath all the property and estate, real and personal, above described, which I shall own, or be entitled to dispose of at my death, unto my son-in-law, Benjamin F. Butler, of Scarsdale, Westchester county, and state of Hew York, as trustee, in and upon the following trusts and conditions ; that is to say: ” Then follows a power to sell, to discharge, to collect rents and issues, to discharge taxes and assessments, to pay for insurance, to erect and repair buildings, to sink mines and construct roads, bridges, railroads, canals, etc., to purchase rights or claims, and to purchase adjoining lands. Power is also given, for the purpose of raising money for any of the above objects, to mortgage said lands or any part of them from time to time. And the trustee is authorized, if there be any surplus, whether of income or proceeds of sale, or of insurance after satisfying the purposes mentioned in said clause, to distribute the same in certain proportions.

By his codicil to said will, the testator provided as follows :

“ First. Inasmuch as property disposed of in the sixth clause of said will is intended to include among other things all rights which I may have in, or in relation to, certain lands and premises situated in the state of West Virginia, which was formerly owned by me, in common with my deceased brother, Grenville Parker,, his interest in which said lands, his widow (both in her individual right and as his administratrix) and his only surviving daughter have, by an instrument duly executed between us and bearing date the fourteenth day of February, eighteen hundred and eighty-two, agreed to sell and convey to me (with other property) for the agreed price of $18,000; now, therefore, to prevent any misunderstanding in relation thereto, I hereby direct that the trustee named in the said sixth clause of my said will, after paying out of the proceeds of the sales of the trust property in said clause devised to him, such taxes, assessments, or other charges or incumbrances as he may think proper to be first paid thereout, shall use and apply the next moneys received by him from the said trust property (whether from rents, proceeds of sales, or otherwise), in and towards the payment and satisfaction of the said sum of eighteen thousand dollars, or so much thereof as shall then remain unpaid, according to the provisions of the above mentioned agreement, and I hereby direct that if my said brother’s interest in so much of said lands as are in West Virginia shall not have been conveyed to me prior to my death, such conveyance shall be made to the trustee named in said-sixth clause, or to his successor in the trust, he and they being hereby designated as the persons entitled to demand such conveyance under said agreement.
“Second. And inasmuch as I have also within a few years pást expended sundry sums, amounting in the aggregate to $30,000 or more, in and about the management and preservation of my said properties in West Virginia, by reason whereof my general estate has been diminished by that amount. Now, therefore, I do hereby further direct that the said trustee named in the said sixth clause of my said will, after he shall have paid in full the $18,000-mentioned in the next preceding clause of this, codicil (or so much thereof as shall remain unpaid at my death), shall use and apply the next moneys received by him from the said trust property (whether from rents, proceeds of sales, or otherwise), in and towards refunding to my executors the sum of thirty thousand dollars aforesaid, which shall thereupon be and become part of my personal estate; and if the said trustee shall not so refund that sum on or before the expiration of two years after my death, then he shall also pay interest on the same, or on so much thereof as shall then remain unpaid from that date until paid, at the rate of five per cent, per annum. But if, before my death, I shall receive from my said property in West Virginia any sum or sums (over and above the current expenses of preserving and maintaining the same) more than sufficient to satisfy my obligations under the above mentioned agreement relating to the interest of my deceased brother, Grenville Parker, then the excess over that amount so received by me shall go to diminish the sum of $30,000 which the said trustee is to refund to my executor as in this clause is provided.
“Third, I direct that no distribution of proceeds of the property devised or bequeathed in the said sixth clause of my said will shall be made to any of my descendants, as in said sixth clause provided, until the two sums mentioned in the first and second clauses of this codicil are first paid. But nothing herein contained shall interfere with the discretion given to the said trustee in relation to applying the proceeds or avails of such trust property to such uses as he shall deem necessary or proper for the preservation, management, or judicious developernent or improvement of said trust property in whole or in part; all of which expenditures shall, if he think proper, take precedents of the payments in the first and second clauses of this codicil provided for."

On the 14th of May, 1883, the testator paid off the $18,000 provided for by said contract, although he had received from sales of West Virginia property a comparatively small sum in cash, and received a deed from said Emily T. Parker therefor, the said Eliza A. Parker having previously thereto died intestate.

It is now claimed by the appellants that it is manifest, from the will and codicil, that it was the intention of the testator to charge the trust estate devised by 'the sixth clause of the will with the purchase price mentioned and contained, viz., $18,000, and to save the testator’s general estate from any diminution by its payment. And this claim is founded upon the provision which the testator makes in his codicil in reference to the repayment to his estate of the $30,000 which had been disbursed by him in connection with his adventures in West Virginia lands. It would certainly seem to have been the testator’s intention to indemnify his general estate for the disbursements made by him on account of these West Virginia lands, which is evidenced by the provisions referred to with respect to the repayment of the $30,000. But, although in the construction of wills when we are sure that we know what the testator means, we have a right and it is our duty to subordinate the language to such intention, and the court may even reject words and limitations, supply them and transpose them to get at the correct meaning, nevertheless, the court has not as yet inserted clauses in a testator’s will made necessary by the change of circumstances in the testator’s property, which have occurred subsequent to the execution of the will, and for which the testator has not provided.

In reference to this question, arising upon the construction of this will, it is difficult "to see that the testator has anywhere so provided; and it is only by the interpolation of such provision bodily into the will that any such construction can be given to the codicil.

It is argued upon the part of the appellant that, by the provisions of the codicil in reference to the payment of the $18,000, he has not stated to whom that sum is to be paid, and that, as he has not provided that it should be paid to the vendor’s, the fair interpretation from the general character of the codicil is that he intended it to be paid to the personal representatives of his estate if he paid it before his death, in order that the special design of indemnifying his general estate as against the West Virginia disbursements may be carried out. It seems to us, however, that a very cusory examination of this codicil shows that no such construction can be put upon it,and that was not the intention of the testator, but that the sole payment which the trustee was authorized to make was to the vendor of the West Virginia property, and to nobody else. He provides that the trustee “after paying out of the proceeds of the sales of the trust property in said clause devised to him such taxes, assessments or other charges or- incumbrances he may think proper to be first paid thereout, shall use and apply the next moneys received by him from the said trust property (whether from rents, proceeds of sales or otherwise) in towards the payment and satisfaction of the sum of $18,000, or of so much thereof as shall then remain unpaid.

This is a clear and direct direction to the trustee that he shall use the surplus of the proceeds of the sales of all the property in West Virginia to the liquidation of this debt; not as required by the contract, to use only the proceeds realized from the sales of the land mentioned in the contract, but, as soon as he is put in funds from any source, to liquidate this indebtedness up to the amount which might remain due. To whom? Clearly not to himself, nor to any other branch of his estate, but to the vendors. If there was any doubt in regard to this, the last clause of this paragraph of the codicil would seem to set it at rest. He contemplates the possibility before his death of having paid this 818,000, and that these lands may have been conveyed to him, because he says: ‘Thereby direct that if my said brother’s interest in so much of said lands as are in West Virginia shall not have been already conveyed to me prior to my death, such conveyance shall be made to the trustees named in said sixth clause, or to his successors in the trust.”

What does the testator mean by this clause if he did not contemplate the possibility that he might acquire the title before he died? How, he could only acquire the title by paying the $18,000. It is clear that his intention was that either he or his trustee, as soon as it could be done, should acquire the title without waiting for the realization of the $18,000 from the sale of these particular lands. His trustee is to pay so'much as remains unpaid. He is to get the title if the testator has not gotten it before. How, to say that the testator did not contemplate doing what ' he did, viz., acquiring the title to this property before his death, seems to us absolutely to ignore the plain and explicit language of the testator where he speaks of just that contingency. It is idle to say that he did not mean payment to the vendors, but meant payment to his personal representatives. If he did so intend, he has certainly used language which is absolutely inconsistent with any such idea He, having contemplated the acquisition of this property and the payment of the whole amount in his-lifetime, can it be said that there was any intention by this codicil to direct the payment of any portion of that $18,000 to anybody, if he had already paid it himself? In the next clause of his codicil he is equally explicit to what he means. After having recited the fact that he had expended $30,000 in and •about the management and preservation of bis other properties, he proceeds: “Now, therefore, I do hereby further direct that the said trustee named in the said sixth clause of my said will, after he shall have paid in full the $18,000 mentioned in the next preceding clause of this codicil (or so much thereof as shall remain unpaid at my death), shall use and apply the next moneys received by him from said trust property, ■ &c.” What did he mean by “so much thereof as shall remain unpaid at my death?” Bid he mean so much as should remain unpaid to himself, or to the vendors of the property? It is clear that he did not mean so much as might remain unpaid to himself, but it was the expression of the intention which had been clothed in apt language by the previous paragraph of the codicil, viz.: That the trustees were to liquidate this debt first, if any debt existed, and then apply the proceeds of the sales to the payment of the $30,000 to his personal representatives. And then, as if to put at rest any possible imputation that whatever might have been paid by him upon this $18,000 should be added to the $30,000 which was to be paid to his general estate, he continues: “But if, before my death, I shall receive from my said property in West Virginia, any sum or sums (over and above the current expenses of preserving and maintaining the same), more than sufficient to satisfy my obligations under the above mentioned agreement relating to the interest, of my deceased brother, Giren ville Parker, then the excess over that amount so received by me shall go to diminish the sum of $30,000 which said trustee is to refund to my executor as in this clause is provided. Here it appears that the testator had in his mind the relation between the $18,000 and the $30,000, and he has deliberately provided that if he received in excess of the $18,000 from his property in West Virginia, the surplus was to go to diminish the amount of $30,000 to be refunded. But he says not one word to the effect that in case he does not receive the whole $18,000 from his West Virginia estate, any portion of it which he may have paid is to go to increase the $30,000 which is to be refunded to his executor.

Now it is sought by the construction asked for to add to the testator’s will a clause requiring the addition of this $18,000 to the $30,000, which the testator has declined to do for himself. It is asked: “To whom, then, was the testator referring, and to whom were the payments of the $18,000, or the part thereof unpaid at his death, to be made? Undoubtedly, to the general estate.”

But, when the testator wanted to provide for a payment to his general estate, he had no difficulty in finding adequate language to express his meaning. The only possible point in support of the construction claimed by the appellants is in the use of the word “ also ” in the second clause, “ And inasmuch as I have also within a few years last past expended certain sums.” But this word can have no such force and effect as is claimed for it. Suppose he had recited in the prior clause that he had paid $18,000 and taken a deed, and then “I have also paid $30,000,” and directed his trustee to reimburse his general estate for the $30.000, could the general estate have lugged in the $18,000 under the the short word “ also ? ” We think not. We think that if any weight is to be attached to this word it is that there is a distinction being made between the $18,000 and the provision for the repayment to his general estate of the $30,000. It is evident that he had them both in mind. He chose to provide for the reimbursement of the one and not of the other; and, this being the plain construction of the language used, this court will not make another will for him.

There is another question presented as to the construction of this will arising upon the following facts: Included in the West Virginia lands mentioned in the contract of February 14th, 1892, and subsequent deed from Emily T. Parker on the 14th of May, 1883, was an interest in the Gruyandotte tract. A. A. Low and William H. Aspinwall’s devisees also had an interest in this tract; and on the 11th of December, 1883, the testator and his fellow-owners conveyed this tract in fee to A. A. Low, John A. Aspinwall and Benjamin F. Butler. They executed a declaration of trust of the same date, which the appellant claims, shows that they took the tract in trust for sale. But where any such intention is found, from one end of the declarttion to the other, we have been unable to discover, as will be subsequently seen. On the 6th of January, 1890, Low, Aspinwall and Butler, as trustees, by a deed sold and conveyed said tract for $460,000, the purchase money being partly paid to the trustees under the deed and the balance secured by a mortgage, and many thousand dollars, part of said purchase money, have been paid over by the trustees under the deed and declaration to the defendant, Butler, as trustee, under the sixth clause of the will, and the question involved is, does the sixth clause of the will operate on proceeds of land in West Virginia, transferred by said testator under said deed and declaration of trust ?

In the determination of this question it is necessary to consider very briefly the declaration of trust, it being assumed to be the creation of a trust for the purpose of a sale by the trustees. The deed is a simple deed, in the short form obtaining in West Virginia. By the declaration of trust, after reciting that the grantors in the deed were interested in the lands in question, and that there was litigation in respect to the same, and it was deemed necessary, in order to facilitate the further and final settlement of the title, that the legal and equitable title to said real estate should be transferred to and vested in the trustees, the trustees covenanted and agreed to accept and hold the said real estate, and all such right, title and interest therein as was yested in and held by the grantors in the deed at the time of the execution thereof, in trust for and to the only proper use, behoof and benefit of the parties of the second part (the grantors), their heirs and assigns forever, according to the right, title and interest, which they respectively have therein. The declaration then proceeds:

“And the parties of the first part (the trustees) further covenant and agree at all times to make and execute, in due form of law all such coveyances, contracts, agreements and letters of attorney of and in relation to said real estate, or any part or parts thereof as the parties of the second part, or a majority in interest of them, their heirs and assigns, may, in writing direct, and to do any and all acts in relation to said real estate and every part thereof which the parties of the second part, their heirs and assigns, may, in writing, direct. But it is expressly agreed and understood, by and between all the parties, "that every conveyance, contract, agreement and power of attorney executed by the parties of the first part of and in relation to said real estate, or any part of it, shall be valid and effectual for the purpose intended by it, as between the parties to this deed and declaration of trust, and the person to or with whom such conveyance, contract, agreement, or power of attorney is made, whether the same be directed by the parties of the second part as herein provided or not; it being the intention of all the parties that every person purchasing and taking conveyances of the said real estate, or any part of it, from the said parties of the first part, or their agent and attorney in fact, shall have all such right, title and interest in and to the same as the first and second parts now have, or which .the parties of the second part had at the date of their said deed to the parties of the first part.”

This is the only provision in this whole declaration where there is the slightest reference to any sale by these trustees. And all that this provision was inserted for evidently was to assure the title to all persons who might take under this declaration, relieving them from the necessity of proving a direction to convey. It may have been in the contemplation of the parties that these trustees should sell, and undoubtedly the persons taking title from them would get a good title, notwithstanding the failure to direct on the part of the beneficiaries under the trust. But the trust is absolutely silent as to any authority upon the part of the trustees to convey, as between themselves and their cestuis que trust, except as they might be directed. Now, under these circumstances, how is it possible to say that there was any intended conversion of this estate from realty into personalty, or that it should be considered as money ? The testator may not have had a legal title to the estate in question at the time of his death. But that he had an equitable interest therein seems to be beyond controversy; and that that was the true interest is borne out by the examination of the deed and the declaration of trust. It may be somewhat difficult to determine exactly what the testator parted with under those two instruments. But that he still retained an interest in this property seems to be beyond all question. And it is not necessary to refer to the statutory provisions of West Virginia in aid of this construction. If it was an equitable interest in land, it is clearly embraced within the language of the sixth clause, where he speaks of being the owner of lands, and contracts for the purchase or sale of lands, leases, mortgages and equitable interests and rights in and to lands in West Virginia. And all this property thus described he gives to his trustees. And even if this interest should be described as personal property, he has included it in the language of his will. He says, after having described the property as above stated: “ Mow, therefore, I hereby give, devise and bequeath all the property and estate, real and personal, above described, which I shall own or be entitled to dispose of at my death.” He did not intend to leave anything out—realty, contracts for-the purchase or sale of lands, leases, mortgages, equitable interests, rights and personal property pertaining thereto. All were to pass to this trustee. And this is in harmony with the declaration in his will that he desired to make a special disposition of this class of property from that which he made of his general estate, and to establish a trust in respect to this particular property. And in his codicil he says that his will was intended to include all rights which he might have in or in relation to certain lands and properties situate in the state of West Virginia, which were formerly owned by him in common with his deceased brother, Grenville Parker, whose interest in the lands in question was then under contract to be conveyed to the testator.

It is clear, therefore, that he intended to remove all ambiguity, and that he construed the sixth clause himself to mean all rights which he might have either in or in relation to any of these lands. It certainly would be an entire denial of the explicit language of the testator to take out of the operation of the will rights in relation to the very land which he says are intended to be included therein. We cannot see how any such construction can be adopted. As already observed, it is immaterial whether the interest under the deed "and declaration of trust is to be considered as personalty or an equitable interest in land. . It was his plain intention to conclude within the terms of the will and codicil every interest of every kind which might be the result of or belong to those West Virginia lands.

We might call attention to the provisions of the will in reference to the $30,000 in aid of this construction, where he authorizes application of any sums which might be received from his West Virginia property during his lifetime to the diminution of the sum of $80,000, which the trustee was to refund to his executors. There is no provision whatever for the transfer to his general estate of any portion of the proceeds of the West Virginia lands, except for the one purpose of the repayment of the $30,000 which was in the codicil provided to be refunded; another indication that he did not intend that any portion of the proceeds of these lands should go into the general estate, but should go to his trustee.

Upon the whole case, therefore, we are-of opinion that the construction given to this will by the court below was the correct one, and the judgment should be affirmed, with separate bills of costs to the respondents to be paid out of the estate.

O’Brien and Parker, J. J., concur.


author: Follett, J.

text:
    The People ex rel. W. & J. Sloane, Resp’t, v. Edward P. Barker et al., as Commissioners, etc., App’lts.

      (Supreme Court, General Term, First Department,

      Filed March, 1894.)

    1. Taxes—Corporation.
    In ascertaining the assessed valuation of a corporation, “ the non-taxable assets ” are not to be deducted from the indebtedness of the corporation.
    3. Same—Vacation.
    The assessment upon corporate personal property must he vacated if, after deducting its non-assessable property and its assessed real estate from its gross assets, real and personal, its indebtedness exceeds the remainder.
    Appeal from an order of the special term, vacating an assessment for 1892 upon the relator’s personal property, valued at $902,631.53.

      George S. Coleman, for app’lts; Henry H Anderson, for resp’t.
   Follett, J.

W. & J. Sloane is a business corporation, organ- • ized in January, 1891, under the laws of New York, with a share capital of 3,000,000, all of which has been paid in and all of the shares issued. The principal office, or place for transacting the financial business of the corporation, is and has been kept at Nos. 880 and 888 Broadway.

In 1892, the deputy tax commissioner whose duty it was to value the corporation’s capital for taxation, valued it at $3,000,-000, which assessed valuation was entered in the books of the commissioners of taxes and assessments. Afterwards, and on the 18th of February, 1892, the corporation, by its treasurer, made, verified and filed with the commissioners the following statement:

“ Statement made and delivered to the commissioners of taxes and assessments of the city and county of New York, for and in behalf of the corporation of W. & J. Sloane, showing its condition for the purpose of assessment on the second Monday of January, 1892 :
Total gross assets on January 1.................$7,974,698.87
Capital stock actually paid in, or secured to be paid in............................ 3,000,000.00
Amount of surplus earnings................ 300,000.00
Bate of dividend of last year, or last annual dividend ...... 2.00
Indebtedness in detail as follows: Bonds, loans, bills payable and book accounts............ 5,556,118.00
Assessed value of real estate and ward map numbers): (describing particularly by ward
Ward. Map Nos.
5th. 354 to 356, 1732¿
Location.
Nos. 407 to 411 Greenwich st., and No. 15 Hubert street.
Assessed
Value.
$57,500.00'
Ward.
15th.
18th.
18th.
Map Nos.
1321 to 1323
335 to 339, 4264 to 4266, 4340 to 4344.
4344-J-, 4345.
Location.
Nos. 14 to 18 West 13th st.
Nos. 880 to 888 Broadway, 33 to 35 East 18th st., 28 to 34 E. 19 th st.
Nos. 36 to 38 E. 19th street
Assessed Valúa
37,500.00
500,000.00
40,000.00
$635,000.00
Amounts invested in the stocks of other corpora-
tions which are taxed upon their capital..... $610,875.00
Amount invested in IT. S. securities............. 400,000.00
Imported goods in unbroken packages.......... 1,006,310.00
Portion of capital invested in foreign countries and
in other states........................... 578,949.34
“ (If the stock of the company is worth less than par state the actual value, and give the facts under oath which will justify such estimate of its value.)
“The stock of the company has no market value, as no sales, have been made in open market, and it depends largely upon the personal skill and capacity of the managers.
“ The principal office, or the place of transacting the. financial business of the said corporation, is situated in the eighteenth ward of the of New at Nos. 880 to 888

After this statement was filed, and in February or March, 1892, the treasurer of the corporation was examined before the commissioners, pursuant to § 820 of the consolidation act, who thereafter made an assessment upon the following basis:

Corporation’s gross assets......................$7,974,698.87

Deductions allowed by commissioners:

Corporation had invested in shares of other corporations taxed on their capital.................

$610,875.00

Corporation had invested in U. S. securities..................;.

400,000.00

Value of goods imported by the corporation and on hand in unbroken packages.............

1,006,310.00

$2,017,185.00

$5,967,513.87

Indebtedness of corporation......$5,556,118.00

Less non-taxable assets (as above). 2,017,185.00

--$3,538,933.00

$2,418,580.87

Assessed value of corporation’s real estate................... $635,000.00

Corporation’s property outside of this state.................... 578,949.34

Surplus 10 per cent, on $3,000,000 300,000.00

- $1,513,949.34

Yalue of assessable personalty................ $904,631.53

The assessment was made for $902,631, an error of $2,000 having been made by the commissioners.

Upon what theory the commissioners deducted the sum of $2,-017,185, denominated by them “non-taxable assets” from the indebtedness of the corporation, is not apparent. This, in effect, was what was attempted to be done in People v. Ryan, 88 N. Y. 142, and was held to be illegal.

The commissioners should have made up their statement as follows:

dross assets of corporation, real and personal... $7,974,698.87

Investments in taxable shares of other corporations. Not assessable (chap. 456, L. 1857, § 3).. $610,875.00

Investments in U. S. securities. Not assessable (U. S. R., § 3701; People v. Commissioners, 90 N. Y. 63 ...................... 400,000,00

doods imported by corporation and held in unbroken packages. Not assessable (Brown v. Maryland, 12 Wheat., 419 ; Bur. tax, 86 ; Cool, tax, 61, et seq.)...... 1,006,310.00

Property outside of the state. Not assessable (People v. Commissioners, 23 N. Y., 224; Graham v. First Nat. Bank, 84 id., 303)... 578,949.34

Surplus on capital stock. Not assessable (chap. 456, L. 1857, § 3) 300,000.00

Assessed value of real estate to be deducted from gross assets (chap. 456, L. 1857, § 3)............ 635,000.00

$3,531,134.34

$4,443,564.53

Indebtedness of corporation to be deducted from taxable assets (People v. Barker, 141 N. Y., 146)

$5,556,118.00

$1,112,553.47

After deducting the non-assessable property of the corporation and its assessed real estate from its gross assets, real and personal, its indebtedness exceeds the remainder by $1,112,553.47, as appears by the foregoing statement.

The commissioners now seek to justify their action on the ground that the treasurer of the corporation, when examined before -them, declined to answer questions put by them to him. The difficulty with this position is that the record does not disclose the questions which the treasurer refused to answer, nor the subject to which they related. It does not appear that the questions related to the indebtedness of the corporation, and, for aught that appears, they may have related solely to the amount invested in United States securities, and further, the commissioners did not disallow any of the items of the statement made and filed, but found it to be true, and made their assessment on the basis of the truth of the statement. If, for example, the treasurer had refused to answer proper questions put by the commissioners in respect to the corporation’s indebtedness, or had given evasive or unsatisfactory answers, and the commissioners hhd found that the indebtedness was less than the amount stated, a different question would have been presented.

The order of the special term should be affirmed, without costs,

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