text:
    Edgar L. Ridgway, as temporary administrator, Resp’t, v. Charles P. Bacon, Imp’ld, App’lt.

      (Supreme Court, General Term,, First Department,

      Filed October 13, 1893.)

    1. Attorneys—Lien—Parties.
    One who has assigned a lien as collateral security may, if he have an existing interest in it, maintain an action for its enforcement, and the assignee is a necessary party to such an action.
    2. Same.
    The fact that the promise which the lien was given to secure the performance of is negotiable instead of non-negotiable, is no defense to such, an action.
    3. Same.
    In such an action it is proper to join as defendants with the original assignee of the lien, a sub-assignee who claims an interest in it, the person who originally created it, and the executor of the estate who holds the fund out of which it is to be paid.
    Appeal from judgment overruling demurrer to the complaint,

      Charles Donohue, for app’lt; Sumner C. Chandler, for resp't.
   Follett, J.

This is a very simple and common equitable action brought to have it adjudged that a lien exists on a specific fund in the hands of one of the defendants, for its enforcement out of that fund, to determine the rights of the two rival claimants to the lien, and for the recovery of a judgment for any deficiency against the person who gave the lien as security for the performance of his promise to pay a definite sum of money. Such an action may be maintained by a court of equity. Fletcher v. Morey, 2 Story, 555 ; Jones Liens, §§ 43, 93 ; Pom. Eq. Jur., §§ 169, 170,1237. It is alleged that by final judgment of the courts of this state and of the supreme court of the United States there is a fund in the hands of the defendant Boardman which belongs to the defendant Fiske, who, September 4, 1880, executed and delivered to defendant Bacon an assignment, of which the following is a copy:

“ In consideration of legal services and money expended by Charles P. Bacon, now of the city of New York, in the action relating to the estate of the foregoing Jennie McGraw Fiske, which is now pending in the supreme court of the United States, I Willard Fiske, of Ithaca, New York, temporarily sojourning in Florence, Italy, do hereby assign and transfer unto said Bacon thirty per cent, of any and all moneys which may become due to and directed to be paid to me by any judgment in said action, or in any proceedings in the above-entitled matter in the surrogate’s court of Tompkins county ; provided, however, that the said Bacon shall pay and satisfy any and all counsel fees and expenses incurred in my behalf in said litigation.
“Dated, September 4, 1889.
Willard Fiske.”

It is further alleged that on the 24th of September, 1889, the defendant Bacon made and delivered his promissory note to William L. Muller, by which, for value received, he promised to pay Muller or order $25,000 six months after date, at the Farmers & Mechanics’ Bank, at Elmira, N. Y., and that for the purpose of securing the payment of said note said Bacon executed and delivered to said Muller the following assignment:

“ Whereas, an action is now pending on appeal in the supreme court of the United States in relation to the estate of and to the last will and testament of the above named Jennie McGrraw Fiske, and whereas, I am the attorney of record in said action for Willard Fiske, one of the parties thereto; and whereas 1 am indebted unto Y/illiarn L. Muller for legal services rendered in said action, and for money advanced by him to me : Now, therefore, in consideration thereof I do hereby asssign, transfer and set over unto said William L. Muller, the sum of $25,000 dollars out of the amount coming to me in said action in pursuance of my agreement with said Willard Fiske in relation thereto, (a copy of which said agreement and of the whole thereof is hereto annexed). And I hereby authorize and direct the executor of said estate, or the surrogate of Tompkins county, New York, or such other proper person or officer, to pay over to the said Muller or his assigns, out of any moneys due and owing from said estate to said Willard Fiske, said sum of twenty-five thousand dollars. And I hereby authorize and direct said Muller to execute a receipt for said sum in his own name, which I do hereby declare 1 shall be received by said executor or surrogate or other proper person, and accepted by me as such attorney or assignee as a voucher and payment of said suffi of $25,000 on account of any moneys out of said estate directed to be paid to Willard Fiske, or to me as his attorney or assignee, the same as though executed by said Willard Fiske, or by me as his attorney or assignee.
“Dated, New York, September 24, 1880. ■
Charles P. Bacon."

It is also alleged that on September 24,1880, said Muller made his promissory note, whereby he promised to pay to the order of defendant Lewis M. Smith $5,000, six months after date, which was indorsed by the payee for the accommodation of the maker and was discounted for the latter at said Farmers & Mechanics’ Bank. That when said last-mentioned note was made and indorsed said Bacon executed and delivered to said Smith the following statement :

“ I have given to W. L. Muller, for full and valuable consideration, my note dated September 24, 1889, payable to his order for $25,000, due in six months from said date, and as collateral thereto have executed to said William L. Muller the foregoing assignment. Now, therefore, in consideration of L. M. Smith, of Elmira, indorsing the note of said Muller for $5,000 and interest, dated September 24, 1889, and due in six months from its date, and receiving from said Muller my said note for ,$25,000 and said assignment as collateral security for said indorsement by said Smith, I do hereby declare that my said note to said Muller was given for full value, and that there are no offsets or defenses thereto; and further, that I have not made or executed any other transfer of any of my interest in said contract with said Fiske.
“Dated New York, September 24, 1889.
Charles P. Bacon.”

It is also alleged that said Muller, to secure said Smith for his said indorsement, delivered to him said note made by Bacon for $25,000, and said assignment from Bacon to Muller, and that said note for $5,000 has been1 paid, and that the note of Bacon for $25,000 has not, which, with said assignment, said Smith now holds and refuses to surrender on the ground that he has a further lien on them. These facts constitute a good cause of action against Bacon for the enforcement of the lien and the recovery of a judgment for the deficiency, and the fact that Smith holds or claims to hold the note and assignment as collateral to some promise or liability of Muller is not a good defense in favor of Bacon. It has been long settled that one who has assigned a lien as collateral security may, if he have an existing interest in it, maintain an action for its enforcement, and that the assignee is a necessary party to such an action. Norton v. Warner, 3 Edw. Ch., 106; Simson v. Satterlee, 6 Hun, 305; aff’d, 64 N. Y., 657; Burlingame v. Parce, 12 Hun, 149; Jones Mortg., § 1375 et seq.; Wilts. Mortg. Forec., §§ 14, 15, 79. The fact that the promise which the lien was given to secure the performance of is negotiable instead of nonnegotiable is no defense to the action. There is but a single cause of action set forth in the complaint, and all of the parties are necessary ones. The learned counsel for the appellant urges that his client has no interest in the controversy batween the plaintiff and Smith. That is clear, and it is equally plain that his only interest in this litigation is to delay or escape payment of his debt. If he owes the debt, as he admits by his demurrer, he can escape all liability • and trouble by paying the amount into court, and let the other parties go on with their contest. If he have any defense it can be interposed, and the presence of the other parties to the action will in no way embarrass him. "The original lien was created by Fiske, and the instrument by which it was created contains conditions, the nonperformance of which may defeat the lien wholly or partly, and so lie is a necessary party for the determination of all of the rights of the parties. The executor of the estate of Jennie McGrraw Fiske is the custodian of the fund on which the liens are asserted to exist, who should be bound by the judgment to pay the sum to the rightful owners. This action gives him knowledge of the claims of the parties, and he should have, and undoubtedly desires, the judgment of the court as to whom the fund belongs. What we have written seems to us elementary law, and the only question is whether a party interposing a demurrer so plainly frivolous should be permitted to plead anew. However, he may have some defense, total or partial, and so the judgment should be affirmed, with costs, and the demurrant given- leave to answer on the payment of the costs included in the interlocutory judgment and the costs of this appeal, within twenty days after the notice of the entry of the order on this decision.

O’Brien and Parker, JJ., concur.


source: Caselaw Access Project

author: Parker, J.

license: Public Domain

text:
    Ann Schierloh, Resp’t, v. Mathilda Schierloh, App'lt.

      (Supreme Court, General Term, First Department,

      Filed October 13, 1893.)

    Trust—Consideration.
    Under our statute relating to uses and trusts, the person claiming the benefit of a resulting trust.¡ on the ground that the alienee named in the conveyance took the same in his own name without the knowledge or consent of such person who paid the purchase money, the whole consideration must have been furnished by such person, or at least some definite portion thereof, as a third or a half.
    Appeal from a judgment in an action of ejectment awarding to the plaintiff the possession of the real estate situated in the city of New York.

      Geo. H. Yeoman and E. A. Jacob, for app’lt; Carpenter & Roderick (Geo. W. Roderick, of counsel), for resp’t.
   Parker, J.

The legal estate of the premises in question wag in Kasteen Schierloh at the time of his death, November 30, 1887. He left him surviving, his widow, this defendant, his mother, thig plaintiff, and seven brothers and sisters, his only heirs at law. Some months after his decease, his widow continuing in and claiming the right to possession of the property, this action was commenced to recover possession, the plaintiff claiming, as the mother of deceased, to be the owner of an estate for life therein, and entitled to the possession thereof, subject to the dower right of the defendant. The defendant, as a defense to the action, alleged that the premises were bought and paid for with money furnished said Kasteen Schierloh by her; that he applied to her for the money to enable him to pay for the 'property, at the same time promising that, if she would furnish it, he would cause the same to be conveyed to her, and, relying upon such promise, she delivered to him the money with which to pay for the property, and obtain a conveyance to her, but in violation of his promise, and without her knowledge or consent, he caused his own name to be inserted ; and in her prayer for relief she asked that she be adjudged to be the equitablé owner of the premises. The record discloses that the purchase price of the property was $13,500, of which $5,500 was paid in cash, and the balance was secured by a purchase money mortgage which Schierloh, prior to his death, had reduced by payments, made from time to time, to $3,000. Defendant does not claim to have furnished the whole of the money paid at the delivery of the deed, but only $1,175 of such amount, so that it appears, even from the testimony presented on her behalf, that $4,300 of the original payment was made by Schierloh from his own funds ; and it is not disputed that the payments in reduction of the principal of the mortgage, aggregating $5,000, were also made by him. The cause was tried before a court and jury. Five questions of fact were submitted to and answered by the jury. The result of such questions and answers may be briefly stated as follows : The defendant, at the request of her husband, furnished him with $1,175, with which to pay in part for the property, at about the time of the delivery of the deed, he promising that in consideration thereof he would have her made grantee in the deed, which promise he did not keep. An attentive examination of the testimony upon which the jury founded the finding that Schierloh promised to cause the property to be conveyed to his wife in consideration of her furnishing the sum of $1,175 towards the payment of the purchase price of $13,500 leaves us in doubt as to "the correctness of the finding. One witness testified that in a casual conversation which Schierloh liad with him about the time the property was purchased, which was nearly twenty years before, he said that his wife expected that the deed would be made •out to her, but he was going to take it in his own name, as it would help his credit; another, that at Schierloh’s request he had asked her to let him have the money, and she said she would “if he would put the money in the deed; ”-and still another testified that he told Schierloh his wife would give him that money if he put her name in the deed, to which Schierloh replied, “Yes; I will." This is the strongest expression used, and considered in the light of the other testimony of the witness, as well as the evidence to the effect that she would let him have the money if he would put it in the deed, suggests that the wife was attempting to secure an interest in the property proportionate to her investment, rather than the entire estate. This witness testifies to another suggestive fact, that when the $1,175 was paid over to Schierloh in the presence of his wife the witness prepared the receipt, which Schierloh was requested to and did sign. It was in these words: “ I, the undersigned, receive $1,175 from my wife through Louis Hahn.”

It is worthy of note that pains were taken to secure a receipt for $1,175, but no effort was made to ascertain whether her name was in a deed, by which she would now have it appear that she ■expected to secure a much larger return than her investment. Again, if an agreement had been made by which she was to become the purchaser of the property to be paid for by her husband with the exception of the $1,175, it is a little remarkable that she should have deemed it necessary to exact from him a receipt for the money, as well as his promise that she should have the entire property. Still another pregnant fact appears: Mrs. Schierloh left her husband in 1884, remaining away from him a few months. During her absence she commenced an action for limited divorce, and then, as she testifies, she for the first time learned that the title to the property was in his name; yet she went again to live with him, and continued to do so down to the time of his death, a period of about three years, and it does not appear that she took any steps whatever, during his lifetime, to right the wrong which she claims to have suffered at his hands. But, assuming the facts to be as found by the jury and adopted by the court, we reach the same conclusion as did the trial court, that the defendant has failed to establish that the equitable title was in her. As the legal title was in Schierloh at the time of his death, it was necessary for her to establish that she was the owner of the equitable title in order to prevent a recovery in the action. It could not avail her as a defense to establish a lien against the property. ISTor could it be done in this action, to which neither the heirs at law nor the .legal representatives of the intestate are parties. For that reason, also, if there were no other, defendant could not have a decree of specific performance, and the point made on the appeal touching that subject will not receive other consideration.

We have left, then, for decision, whether under the facts found there resulted a trust in favor of the defendant. The rule at common law was that if lands were conveyed to one person, the consideration for which was paid by another, a trust resulted in favor of the person who paid the price. But our present statute relating to uses and trusts, part 2, chap. 1, tit. 2, art. 2, § 51, p. 728, Bev. St., provides: “ Where a grant for a valuable consideration shall be made to one person, and the consideration thereof shall be paid by another, no use or trust shall result in favor of the person by whom such payment shall be made, but the title shall vest in the person named as alienee in such conveyance, subject only to the provision of the next section.”

To this provision the legislature very properly made one exception. It declared that its provisions should “ not extend to cases where the alienee named in a conveyance shall have taken the same as an absolute conveyance in his own name, without the consent or knowledge of the person paying the consideration, or where such alienee in violation of some trust shall have purchased the lands so conveyed with moneys belonging to another person.” Id., § 53. The latter exception has no application to this case. Whether the former has we are to determine. If the defendant had furnished the whole consideration, there would be no doubt but, under the facts found, she would be within the protection of § 53. Does the fact that she only furnished, and understood that she was only furnishing, a portion of the purchase price, take this case without the statute ? The appellant has not called our attention to any case holding that a trust results for the benefit of a person furnishing only a part of the consideration, and it would be strange, indeed, if such a case could be found, unless it should be one holding that a trust resulted as to an undivided one-fifth or one-half of the property, accordingly as the party had contributed a one-fifth or one-half of the purchase money. Justice Bronson, in Sayre v. Townsend, 15 Wend., 649, in a learned opinion reviewing the cases in this state and England as well, reached the conclusion that the consideration for the whole estate, or for the moiety or one-third part, or some other definite part of the whole, must be paid to be the foundation of a resulting trust, which would necessarily be for such a definite part of the estate as the money contributed would pay for. In Garfield v. Hatmaker, 15 N. Y., 477, and Lounsbury v. Purdy, 18 id., 515, this question was not presented, and therefore cannot be deemed to have been decided, but in the opinions of the court, delivered through Judge Comstock, it was assumed that, in order to establish a resulting trust, the whole consideration must be paid by the party claiming it.

In Niver v. Crane, 98 N. Y., 40, the court had under consideration a case which it was claimed was within § 52, and, from the similarity of the.language employed in §§ 52 and 58, the argument and decision of the court under § 52 would be alike applicable to a case claimed to arise under § 53, as here. Section 52, referring to § 51, provides that “ every such conveyance shall be presumed fraudulent as against creditors, at that time, of the person paying the consideration.” Section 53 declares “that the provisions of the preceding fifty-first section shall not extend to cases where the alienee named in the conveyance shall have taken the same as an absolute conveyance in his own name, without the consent or knowledge of the person paying the consideration.” In that case it appeared that the alienee in the conveyance, and her husband, who was the debtor of the plaintiffs, each furnished a part of the consideration; and the court said: “ From what has been already stated, it is apparent that a part of the consideration came from Mrs. Crane, and not from her husband; enough, therefore, to show that the plaintiff’s case is not within the exception created by the statute. The respondent cites various cases as supporting the judgment. Wood v. Robinson, 22 N. Y., 564; McCartney v. Bostwick, 32 id., 53 ; Baker v. Bliss, 39 id., 70 ; Ocean Nat. Bk. v. Olcott, 46 id., 12. In each of them the entire consideration for the property sought to be reached was paid by the debtor at or before the conveyance, and so they came directly within the statute, and entitled the creditor to the benefit of the trust declared in his favor.”

Because the same language is used in each section touching the payment of the consideration, this case is deemed not only in point, but controlling here. We have observed nothing in conflict with this decision except Sayre’s case, supra, and cases therein cited, and there the only exception suggested is where the contribution of purchase money was of some definite part, such as one-third or one-half. But defendant is not aided by that case, if it be assumed that it is still the law, for her contribution is not of an aliquot part of the purchase price, nor does she claim to recover an undivided interest.

We have so far considered the defense pleaded and the one which the defendant sought to establish on the trial. Appellant now urges that independently of the statute the equitable title should be held to have been in the defendant. She urges that the facts of "this case bring it within Freeman v. Freeman, 43 N. Y., 34, and kindred cases, where upon the faith of an oral contract a party has entered into the possession of, and made substantial improvements on, lands, resulting in a determination that the owner of the legal title was estopped from invoking the statute of frauds, and adjudging the party in possession to have the equitable title. It is not claimed that the facts found entitle this case to be regarded within the principle of those cases, but that the evidence required a finding proposed by defendant, and refused by the trial •court, which, had it been found, would have brought this case within the rule which they establish. The finding requested was as follows:

“ That thereafter the said Kasteen Schierloh, during his lifetime, permitted and directed the defendant to collect, receive, and dispose of the rents and issues of- said property as her own, she being at the time under the belief that the said property was hers, and that she was entitled to the possession of the same, and to the enjoyment of the rents derived therefrom.”

We shall not consider whether’, if the facts were in accordance with the request, her contention would be well grounded, for we agree with the trial court in its refusal to so find. The evidence supported a portion of the request, but there were other and substantial portions not authorized.

Wood v. Rabe, 96 N. Y., 414, cited by the appellant, does not aid her. That was an action brought to enforce an oral agreement in which all the parties to be affected by the determination were before the court. The oral agreement purported to create a trust, and the question was whether a court of equity could uphold it, notwithstanding the statute of frauds. The court said that the breach of an oral agreement to convey lands is not such a fraud as will authorize the court to compel a conveyance, but that plaintiff was not induced to acquiesce in the oral agreement by the promise alone. In addition there were his pressing necessities, and the assurance of those sustaining confidential relations to him, viz., his mother and her attorney, who had been his general guardian, and held that the case was within the principle that one who uses a confidential relation to acquire an advantage which he ought not in equity and good conscience to retain the court will convert into a trustee, and compel him to restore what he lias unjustly acquired.

Were this action of the same character as that, and the necessary parties in court, the facts here would be found to differ in the following essential respects: The oral agreement does not purport to create a trust. It was not mainly induced by the influence of the husband, but rather by the expectation of the wife, as appears from the evidence in her behalf, of securing by such means her husband’s money as well as her own. That she was dealing with him at arm’s length is further evidenced by th^ testimony of an avowed intermediary, who exacted from Schierloh, in her presence, a receipt for the money which she claims to have furnished. Nor did she act promptly on discovery that the agreement ‘had been violated by her husband, but waited until death had sealed his lips before attempting in any manner, so far as appears, to assert her claim. Neither is she attempting to secure merely the sum which the alleged trustee obtained from her under the oral agreement, but, in addition, nearly nine times that sum which was invested by him. Other differences exist, "but need not be alluded to, as the inapplicability of Wood v. Rabe to this one already sufficiently appears. We refrain from discussing the other cases cited, but assert that none of them support an interference with the decision of the trial court.

The judgment should be affirmed, with costs.

O’Brien and Follett, JJ., concur.


text:
    Luther Kountze et al., App’lts, v. Edward S. T. Kennedy, Executor, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed October 13, 1893.)

    False representations—Good faith.
    In an action against the president of a corporation to recover damages for inducing plaintiff to purchase bonds of the corporation by false statements as to its condition, it appeared that at the time of the proposed purchase defendant, not being personally familiar with the corporation books, procured from its secretary a statement of its resources and liabilities, instructing him to make it conservative; the statement was submitted to the company’s counsel for revision, and then, at defendant’s request, he saying lie wished to be “ on the safe side,” the estimate of “bills receivable” was largely reduced, and when presented by defendant, plaintiff was requested to look over the company’s property. Certain items were omitted from the list of liabilities by the secretary, because liability thereon was denied, and other liabilities existed, but it was not shown that defendant knew of them at the time of submitting the statement. It further appeared that defendant had invested a large amount in bonds like those purchased by plaintiff, Held, that a finding that defendant acted in good faith in making the statement was supported by the evidence, and plaintiff’s complaint was properly dismissed.
    Appeal by plaintiffs from a judgment in favor of defendant entered on the report of a referee.

      Wheeler H. Peckham and George W. Van Slyck, for app’lts; William R. Bronk (William B. Hornblower, of counsel), for resp’ts.
   Parker, J.

Defendant’s testator, John P Kennedy, was during the period covering the transaction in controversy, and for a number of years prior thereto, the president of the Howe Machine Company. He was also interested in other enterprises, one of which brought about an acquantance with Kountze, one of the re-suits of which was a request by Kountze that Kennedy advise him •of any business opportunities in which it might be deemed desirable to invest money. Prior to November, 1883, Mr. Kennedy, although president of the corporation, had only a nominal interest in it, having accepted the position at the request of Cornelius K. Garrison, who owned the controlling interest in the stock of the corporation. About that time a Mr. Parmly and Mr. Wheeler purchased Garrison’s interest in the corporation. For his stock, which numbered 30,000 shares, they paid $36,000, and for his account against the company, which was adjusted at $250,000, they issued and delivered to him the first mortgage bonds of the corporation in a like amount. Kennedy was then invited to join with the purchasers in an active participation in the company’s affairs. This he consented to do, and to that end purchased one-third of the 30,000 shares of stock, for which he paid $12,000. To secure the funds deemed to be necessary for the conduct of the business, it was determined to issue and sell second mortgage bonds aggregating $200,000. Recalling the request of Mr. Kountze that he be informed of opportunies for investment, Kennedy told him of the plans of the corporation, at the same time assuring him that, as soon as the matter should be in shape to present to him, it would be done, and an opportunity afforded for the purchase of the bonds. One hundred thousand dollars of the bonds issued were purchased by the plaintiffs, who received, as a bonus. stock of the corporation, contributed by owners of the 30,000 shares, equal to the par value of the bonds. Before the purchase was consummated, Kennedy was requested to furnish Kountze with a statement of the company’s assets and liabilities. In pursuance of such request Kennedy subsequently handed him a statement, which is as follows.

Assess.

Real estate, Bridgeport.......................... $ 460,000

“ “ elsewhere.......................... 34,000

Personal property.............................. 205,000

Mew building and machinery.................... 35,000

Bills receivable, accounts ............:.......... 300,000

$1,034,000

Liabilities.

First mortgage bonds............................ $320,000

Less sinking fund.............................. 50,000

$270,000

Savings bank................................... 80,000

Bills payable and open accounts................. 150,000

$500,000

The referee has found, and upon evidence sufficient to support it, that the statement as to the assets was substantially true; but with reference to the liabilities he found that the balance sheet of the corporation showed an indebtedness, at the time of the preparation of the statement, of $571,001.31, whereas the statement gave the liabilities at $500,000. He further finds that the excess, amounting to upwards of $70,000, was deducted because it was supposed that they were not actual liabilities of the company, or did not properly belong to bills payable and open accounts. The referee further found that there were certain small liabilities, aggregating $8,262.67, which had not been entered upon its books at the time of the sale of the bonds; that another item not included in the statement consisted of a claim against the company by Mrs. Stoclcwell, then in suit, upon which the company denied liability, but subsequently compromised at the sum of $15,000, which it was agreed should be paid in installments. Another item not included in the statement of liabilities of the company consisted of a claim on a draft for $62,475, which claim was then in suit, the property of the corporation having been attached at the time of its commencement. With reference to all of these items the referee found, in substance, that the company insisted that there was no liability on its part, and that collection was resisted by it; Kennedy and the other officers of the company having reasonable cause to believe that it would not be held liable for them. He further found that when Kennedy presented the statement, and made the representation, set forth in the. complaint, he had no intent to deceive or defraud the plaintiffs, but believed the same to be in all respects true, and that he had reasonable ground for believing it to be true.

If the findings to which we have referred are to stand, the judgment dismissing the complaint should be affirmed. The plaintiffs, claiming to have been defrauded, had one of three courses open to them: (1) To rescind the transaction, offering to restore what they had received, and commence a suit for the recovery of the moneys paid. (2) To bring a suit in equity to obtain a rescission of the contract, and to recover what they had parted with, the pleadings containing an offer to restore what they had received. (3) To keep what they had received, and to sue for damages for the fraud. The plaintiffs chose the latter remedy, and thereby assumed the burden of establishing, separately and independently, five things: representation, falsity, scienter, deception and injury. If any one of these essential constituents of an action of this character be lacking, there can be no recovery. Brackett v. Griswold, 112 N. Y., 467; 21 St. Rep., 791.

It is both proven and found that the representations were made, that they were untrue, that plaintiffs were deceived thereby, and that damage resulted; but it is not found that defendant had knowledge that they were untrue ; on the contrary, it is affirmatively found that he believed them to be true, and had reasonable ground for his belief. In addition to the general rule stated by the court in the case last cited, there have been before the courts, many times, controversies where all the requisite elements of such an action were found to be present except knowledge on the part of the person making the representations of their falsity, and its absence has universally been held to prevent a recovery. Marsh v. Falker, 40 N. Y., 565 ; Chester v. Comstock, id., 576; Oberlander v. Spiess, 45 id., 175 ; Wakeman v. Dalley, 51 id., 27; Duffany v. Ferguson, 66 id,, 484; Daly v. Wise, 132 id., 306; 44 St. Rep., 422. An exception to the rule is when the person making the representations assumed or intended to convey the impression that he knew them to be true, though conscious that he had no such knowledge; Marsh v. Fallcer, supra, but that question will be considered, so far as necessary in this case, later on.

We are thus brought to the question whether the findings which assert the good faith of Kennedy, and that the circumstances attending the making up of the statement were of such a character as to afford him reasonable ground upon which to rtest his belief in the truth of the statement, have such support in the evidence as requires the court to affirm them. Kennedy did not make up the statement personally, but requested the secretary to make it, and to make it conservative, and to submit it to the counsel of the company for his approval. The secretary testifies that he prepared the statement with great care, and, when it was completed, lie, believing it to be truthful, submitted it to Mr. 'Wheeler, the company’s general counsel, who looked over it carefully, and revised it, and then it was handed to Mr. Kennedy. When it came into his hands, the bills receivable and accounts were put at $400,000, and Kennedy inquired of the secretary whether he thought that a conservative estimate, and, on being answered that they aggregated more than that, he suggested, in order to be on the safe side, that they be estimated at $300,000. This was acquiesced in, the statement accordingly corrected, and subsequently submitted to Kountze by Kennedy. Of course, there was no evidence to contradict the testimony of Kennedy and the secretary touching the manner in wliich'the statement was made up, and the situation was such that necessarily there could be none. But the referee had the parties before him, and was thus enabled to form an opinion as to the probable truthfulness of the alleged history of the acts anh sayings of the several persons taking part in the preparation of the statement. If fully believed, it tended very strongly to support the conclusion at which the referee arrived. It tends to show that Kennedy not only believed the information which he gave to Kountze to be correct, but also that he had taken reasonable precautions against the making of an inaccurate statement. Personally, he was unfamiliar with the books, and he applied to the person who had them in charge, knew about- them, and was apparently thoroughly competent, to acquire and furnish such desired information. A still further precaution was taken of having the statement examined and approved by their counsel. Further support of the findings is furnished by the testimony of the secretary, assigning the reason which induced him to fix the liabilities at about $7.1,000 less than that shown by the balance sheet, and also the ground which induced the omission of the further liabilities which the referee found in fact existed. In order to appreciate his testimony in that respect, it will be well to bear in mind that the liabilities stated to exist were comprised in three items:

First mortgage bonds............................. $270,000

Savings bank................................... 80,000

Bills payable and open accounts........... j:....... 150,000

Total...................................... $500,000

The first item was correctly stated. The second item represented the principal of the debt due the savings bank, in addition to which the company owed it, $10,018.15, which was an open account, and included in the item of “ Bills payable and open accounts, $150,000,” on the statement presented by Kennedy to Kountze. Therefore, the error, if any there was, in stating the indebtedness at a less amount than shown by the books, must be found in that item. The books show the liabilities on March 1, 1884, as follows:

Bills Payable.

City Savings Bank............................ $80,550 80 Bridgeport Bank........................ ..... 15,000 00 A. B. Stockwell.............................. 10,000 00 Indianapolis Cabinet Co....................... 5,537 10 Sundry bills payable........ ................. 70,477 89 $190,565 79

Accounts Payable.

C. K. Garrison................... $242,237 81 Howe Sewing Machine Co......... 2,625 96 Bridgeport Sav. Bank (Int) ........ 1,800 00 Howe St. property (rent)........... 239 00 Sundry accounts payable.......... 98,281 75

345,184 52

Total.. „

$535,750 31

From these items the secretary made the follow

ing deductions: First mortgage bonds.............. $270,000 00 City Savings Bank................ 80,550 80 A. B. Stockwell.................. 10,000 00 Bridgeport Bank................. 15,000 00 “ “ (Int.). ............ 1,800 00 Indianapolis Cabinet Co........... 5,537 10 Howe Sewing Machine Co......... 2,625 96 Howe St. property (rent),.......... 239 00

Total deductions

$385,752 86

Leaving a balance of bills and accounts payable of. While the statement prese -ted to Mr. Kountze showed..................................

$149,997 45

$150,000 00

The two first items, namely, first mortgage bonds and indebtedness to City Savings Bank were properly deducted because separately stated on the paper given to the plaintiffs. As to the dther items, he testified that he deducted the Stockwell claim of $10,000 because it \ps for a draft drawn on the Howe Machine Company by Stockwell, and accepted by the treasurer, without authority. Subsequently the company successfully defended the suit brought upon it. The Bridgeport bank items, principal and interest, were deducted because the money never came into the possession of the company or benefited it, which claim the company not only refused to pay, but it never was paid, nor has it ever been called upon by the bank to pay it since their first refusal. The Indianapolis Cabinet Company item, he says, he deducted because the Howe Machine Company did not, in fact, owe it. That such apparent indebtedness consisted of a note which he regarded as accommodation paper.. It was given to the cabinet company pursuant to a contract with it that they should use the paper and furnish woodwork for it. When the woodwork should be received, which event had not yet happened, then the company would have property equal in value to the face of the note. With reference to the Howe Sewing Machine Company item, he testified that, while it appeared on the books as a liability, in reality that company was indebted to the Howe Machine Company. The last item, “Howe St. property (rent),” he stated to be simply a transfer account to show the receipts and disbursements of a block of houses. This evidence, if believed, justified the referee in reaching the conclusion that, in stating the liabilities at a less sum than they appeared on the books the secretary acted in good faith, and Kennedy had reason to believe that the deductions from the apparent liabilities were justly made.

This brings us to a consideration of the items which the referee has found to have been liabilities not appearing on either the books or statement. The first consists of various small items, aggregating $8,262.67, which were placed on the books subsequent to the making of the statement. Without stopping to consider the several items making up such amount, it may be said, generally, that some of them were for bills rendered and paid subsequent to the making of the statement; that over one-half of it consisted of taxes which were not entered upon the books until May 26, 1884; and, further, it should be said that it nowhere appears that the secretary knew of the existence of such items when he prepared the statement, nor any direct evidence that Mr. Kennedy knew about them. The referee found that there was an indebtedness to Mrs. Stockwell of $15,-000, which was not included in the statement. The claim, whiob was originally for $100,000, was founded upon a bond purporting to be given by the Howe Machine Company as an indemnity to secure Mrs. Stockwell for any mortgage which she might give for the benefit of the Howe Machine Company. The books contained no reference to its existence, and liability thereon was denied by its officers. The only mortgage that she ever executed was to the Bridgeport Savings Bank, to secure the sum of $15,000, which has been referred to elsewhere as deducted from the liabilities by the secretary, on the ground, as he alleges, that the money never came into the hands of the company. Some time in March or April, 1884, and necessarily after the statement was made a suit was brought on the bond, which was compromised April 19th, following, by the giving of a note by the company for $15,000, payable in instalments. Whether any demand was made, upon the officers of the company for the payment of any sum on this bond prior to the making of the representations does not appear, nor does it appear that Kennedy knew anything about it prior to the commencement of the suit. The referee further found that the company was indebted to the Credit Company, Limited, in the sum of $62,475, which was not included in the statement of liabilities. This liability arose under the following circumstances : A. B. Stockwell, while in London in 1877, drew drafts in such amount upon the Howe Machine Company, which were accepted by his brother, who was treasurer of the company. The proceeds of the drafts were applied to the individual use of the drawer, the company never receiving anjr benefit from them, and their acceptance by the treasurer was without authority. A recovery was subsequently had on the drafts, and the judgment finally affirmed by the court of last resort, the case being reported in 54 Conn., 357, the chief justice of the court dissenting from the conclusion reached by his brethren. Whether Kennedy, at the time of making the statement, had his attention drawn to the pending suit, or had it in mind, does not appear. There is no evidence on the subject, and its omission by the secretary in making up the statement was said to be justified on the ground that nothing appeared on the books in reference to it; the suit, which was of long standing, being regarded by the company to be without merit, their opinion being based upon the advice given by competent and leading lawyers, both in Hew York and Bridgeport, that the claim was without validity, and could not be enforced, A further circumstance tending to show Kennedy’s confidence in the enterprise in which plaintiffs were embarking with him may be found in his loans to the company, and investment in its bonds and stock. The first investment was about four months prior to the making of the statement, when he paid $12,000 for a third interest in the stock. Subsequent to that, and prior to March, 1884, he loaned the company $22,200. He purchased fifty of the same class of bonds as those bought by the plaintiffs, paying $40,000 therefor. Still later, and on October 5th, he paid $7,000 for ten bonds, and December 27th following he-paid $1,400 for two bonds. June 10, 1884, he paid $2,000 for 400 shares of stock, and made a standing offer for the company’s stock at five dollars per share. He also loaned or indorsed for the company to the amount of .$70,000, of which $25,000 still remains unpaid. A further circumstance may be properly alluded to: When Kennedy handed the statement to Kountze, he requested him to go to Bridgeport and look over the property and affairs of the corporation. This he did, and, while there, it is not pretended that he was not afforded every facility for making a thorough investigation.

We have thus alluded to some of the evidence which tends to support the conclusion of the referee that this remarkably inaccurate statement of liabilities, when presented to Kountze by Kennedy, was believed by the latter to be true, ando that there was reasonable ground upon which to found such belief. The record is not without evidence supporting contrary inferences, but it is not of such a character as to warrant this court in setting .aside the findings complained of, on the ground that such determination is against the weight of evidence.

The further point is made that the referee erred in refusing to find “ that the said representations of the defendant to the plaintiffs were so made as to convey an impression to the plaintiffs that the defendant had actual knowledge of the truth thereof.” It is a .significant fact that, although Mr. Kountze was examined and cross-examined in relation to the conversations had between him and Mr. Kennedy prior to, at the time of giving, and subsequent to, the statement, he did not suggest that Kennedy had assumed to have personal knowledge of the condition of the company, or said that he was making statements of his own personal knowledge. Subsequently, and on rebuttal, he gave testimony tending in that direction. His testimony in that respect was afterwards denied by Kennedy. The appellant seeks to draw a contrary inference from the testimony of Kennedy on cross-examination, but after examining it in connection with the rest of his testimony on that subject, and considering it in connection with Kountze’s evidence, the conclusion is reached that the refusal to find as requested has such support in the evidence as requires an affirmance of the determination of the referee in such respect. We •have examined the other exceptions relied on by the appellants, but they do not need discussion. The judgment should be affirmed, with costs.

O’Brien and Follett, JJ., concur.


text:
    Randolph F. Purdy, Resp’t, v. Agnes Lynch, Ex’rx, et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed October 13, 1893.)

    1. Trustees—Conversion.
    Where trustees have once obtained joint possession of a trust fund, and thereafter two of them turn over the fund to their co-trustee, they will be liable for a conversion of the money by him.
    2. Same—Estoppel.
    The fact that a person entitled to the reversion in certain trust property knew that moneys had been turned over to one trustee by the others, and made no objection, does not, in an action against all the trustees for an accounting, estop him from claiming that they were all guilty of a breach of trust, where it appears that he was never consulted about the matter, and did not know that the two trustees intended to leave the matter entirely in the other’s hands.
    3. Same.
    Shortly after there trustees had entered upon the execution of their trust they appointed an agent to collect the rents from the' trust property, and such agent turned the money over to one of the trustees, who misappropriated it. Held, that the trustees were chargeable with having joint possession of such money while in the agent’s possession, and his‘ subsequent payment to one must be deemed to have been done under the direction of all.
    Appeal from judgment in favor of plaintiff entered on report of referee. -

      Charles E. Miller and Henry H. Anderson, for app’lts; Foster & Thomson (James Thomson, of counsel), for resp’t.
   Parker, J.

After the appointment of a receiver for the Guardians’ Savings Institution, in November, 1871, one of its officers, Walter Roche, conveyed all his real estate to three persons, in trust to sell, and with the proceeds pay the creditors of the Guardians’ Savings Institution the several amounts due them on the 1st day of July, 1872, after which to reconvey the remaining property to the trust maker. It was further provided that pajnnents should not be made to creditors except on the delivery of a subrogation by them to Walter Roche of their claims against the bank. Jeremiah Quinlan, the receiver of the savings institution, and James Lynch and John E. Develin, were named as trustees. All of them qualified and entered upon the discharge of the duties of such office. Afterwards Roche conveyed to John T. McGowan, the original plaintiff in this suit, the reversion in the real estate described in the deed to Quinlan and others, in trust to pay his personal indebtedness to certain creditors named, and to reconvey the remaining property to Roche, after payment of the expenses of executing the trust. In March, 1875, McGowan instituted this suit, which resulted in a judgment directing a conveyance to him by Quinlan and his cot'rustees of such of the real estate as remained unsold, and awarding to the plaintiff, as against all the trustees, a judgment in the sum of $53,480.58.- There was actually received from rents and sale of real estate a sum exceeding that paid out by the trustees, either to creditors or as expenses of administration, $43,577.94, which the referee found to be the principal sum due. But the trustees Develin and Lynch insisted on the trial, and their personal representatives still insist, that they ought not to be charged with that sum, or any part of it, because it was wholly wasted by their cotrustee Quinlan, without fault on their part. The trustee Quinlan, as the receiver of the savings institution, was in possession of the books of the institution, and therefore in a position to more conveniently pay and take subrogation from depositors than his associate trustees, and for such reason, doubtless, that portion of the work devolved upon all of them by the trust deed was intrusted to him. The other trustees took part with Quinlan in most instances in selling the real estate, the proceeds of which were in the main deposited in a trust company to the credit of all the trustees. Subsequently it was withdrawn and turned over to Quinlan, who failed to apply the sum with which the referee charged the trustees in the manner required by the trust instrument.

The general rule is, both in England and this country, that where trustees have once obtained joint possession of a trust fund, and thereafter one of them turns over the fund to his cotrustee, he will in case of a misappropriation by his associate be held responsible for it. Sadler v. Hobbs, 2 Brown Ch., 114; Curtis v. Mason, 12 Law J. (N. S.), 442 ; Brumridge v. Brumridge, 27 Beav., 5 ; Adair v. Brimmer, 74 N. Y., 539 ; Earle v. Earle, 93 id., 104 ; Croft v. Williams, 88 id., 384; Bruen v. Gillet, 115 id 10; 23 St. Rep., 780. The reason for the rule is apparent,” and has been often stated. ..As to the fund reduced to joint possession, all the trustees are in a situation to see to it that it is applied in the manner provided by the trust maker, and it is the duty of each to take care that it is so applied. The trust maker having elected not to. permit a distribution of the fund by one trustee, any attempt to thwart his wish by an arrangement between the trustees must betaken on their own responsibility, blot the cestui que trust, but the trustees, assume the burden which may result from their failure to perform the obligations of a trust because of a confidence •which they, and not the trust maker, saw fit to repose in a single trustee. The rule being founded upon a neglect of duty on the part of a cotrustee to see that a proper application is made of the trust funds, it is urged that it should not be held applicable here, where, as the appellants allege, there was no such neglect; their contention being that it was impossible to pay and take subrogation from six or seven hundred depositors without the presence of the books of the bank, which were necessarily in the possession of trustee Quinlan in his official capacity as receiver. If that were so, there was nothing to prevent the associate trustees from being present at the bank, except their personal and business engagements, and the personal convenience and comfort of a trustee cannot be accepted as an excuse for a failure to perform a duty. If it be not convenient for him to perform the obligations of the trust, he must not assume them, but give way to another in abetter situation to discharge them. But there were other ways in which the payments could have been made and subrogations taken without the presence of all the trustees at the bank. Every payment could have been made by means of a check bearing the signatures of all the trustees. It'would likely have necessitated a second visit by the depositors, and occasioned more trouble on the part of the trustees, but it could have been done, and without great difficulty. Had it been1, the question would not now be presented whether the beneficiaries under the second trust deed, or the estate of the solvent trustee*, shall bear the loss.

If the trustees Develin and Lynch had turned over the moneys in small amounts, as it was required in the payment of depositors, and had from time to time examined the subrogations for the purpose of ascertaining whether they represented the sums which Quinlan claimed to have paid to depositors, the amount which Quinlan could have misappropriated, if any, would have been small. But no such precaution was taken. Indeed, in all this large record there is not a suggestion of an attempt on the part of either Develin or Lynch to ascertain whether their associate was faithfully distributing the two hundred and forty odd thousand dollars which came into his hands. No precautions whatever were taken by them to assure such an application of the funds by them turned over to Quinlan as the trust required. Undoubtedly, it was because of their great confidence in the personal integrity of Quinlan, but that does not present a legal excuse. „

It is further contended that the plaintiff is estopped from asserting that the trustees are guilty of a breach of trust because, with knowledge that the trustees "were paying over moneys to Quinlan for distribution among the creditors, he did not object. The facts found by the referee which have a bearing on that question were, in substance: Plaintiff was, from the beginning of the trust, familiar with the action of the trustees, and knew that the money had been turned over to Quinlan by the other trustees for the purpose of making payments and taking subrogations. Plaintiff, in behalf of one of his clients, received a payment from, and gave a subrogation to, Quinlan alone. A petition was served upon Boche, for whom the plaintiff was attorney, in which it was asserted that the trustees were about to pay over the moneys to Quinlan, and asked that commissions be allowed upon such sum, after which Boche and the plaintiff signed a consent that the trustees retain the sum of $6,000 for their commission. There is nothing in the facts found or in the record which tends to show that the trustees were in any manner misled by the silence of the plaintiff. It is not suggested that their action was in any wise influenced by the omission of the plaintiff to speak. Nowhere is it asserted that Devlin and Lynch, in that which they did, supposed that their action was understood and approved by the plaintiff. He was not consulted by the trustees about the matter at all, and, so far as their conduct is concerned, it does not appear that they in the least desired to know whether he or Boche approved of their plan of selecting one of their number to distribute the funds. It is not found, nor does it appear from the evidence, that the plaintiff knew that the trustees neither paid, nor intended to pay, any further attention to the matter, after turning over the moneys to Quinlan. If he did know (as we shall assume that he did, because the fact is so found) that all of the money was turned over to Quinlan, it cannot be assumed, in the absence of any evidence whatever on the subject, that he also knew that, when the money was so turned over, Develin and Lynch regarded their responsibility at an end, and had determined, not to inquire further whether the money should be properly applied. On the contrary, for aught that the record discloses, plaintiff was justified in assuming that the trustees understood the personal risk undertaken when they paid over the money, and had accordingly taken suitable precaution to assure its proper disposition.

It is difficult to discover from these facts any foundation upon which to rest an estoppel, which would deprive the cesiuis que trustent under the last trust instrument from receiving the moneys which of right belonged to them. Assuming that the trustee under the second trust deed might have so conducted himself as to estop him from recovering from those who, by a breach of their trust, had permitted the moneys belonging to his cesiuis que trustent to be wasted, the facts do not exist here upon which to predicate it. The cases cited by the appellant are not applicable to this situation. In Erie Co. Savings Bank v. Roop, 48 N. Y., 293, S. allowed R. to make certain payments under a mistaken belief as to the facts, by which S. derived an immediate and direct advantage over B., and it was held that S.’s silence, under such circumstances, was deceitful and fraudulent. Sherman v. Parish, 53 N. Y., 483, was a suit instituted against a passive trustee, based upon an alleged breach of trust in permitting the active cotrustee to invest a portion of the trust funds in other securities than authorized by the trust instrument It was found as a fact that the plaintiff fully assented and acquiesced in the exclusive control and management of the cotrustee, and especially with the disposition made of the fund which was the subject of the controversy, and that she did this with knowledge of all the important and material facts and circumstances. This was held to relieve the defendant from any personal liability to the plaintiff on account of the acts of his co-trustee. In this case there is neither a finding, nor evidence upon which to base one, to the effect that the plaintiff assented to the exclusive control and management of Quinlan in the disposition of the funds turned over to him.

In Butterfield v. Cowing, 112 N. Y., 486; 21 St. Rep., 500, the trustee omitted to follow the terms of the mortgage, by which he had agreed to be bound, and thus became liable to respond to those suffering damage. Plaintiff was, however, denied relief, because with full knowledge of the facts he first instituted a suit to prevent the carrying out of the plan, afterwards fully accomplished, and then withdrew his suit, uniting in a stipulation in which he formally withdrew all opposition to the scheme, and was given permission to unite with the other bondholders in the new organization, which he promised to do. He desired to obtain a benefit by withdrawing the suit and making the stipulation. His act, in some measure, at least, induced the action of the trustee of which he complained in his subsequent action, and his conduct was properly held to deny him the right of recovery against the defendant, for a breach of trust. A portion of the sum with which the trustees Develin and Lynch are charged by the referee, amounting to-$17,040, never came into their hands. The learned referee based the refusal to so find upon the ground that it was paid to the-counsel for the trustees. In this respect we think he was in error. While the deeds were prepared by their counsel, it does not appear that the payments aggregating such amount were made by or through him. On the contrary, the evidence seems to establish that such was not the fact. Two of the four checks representing such amount were made payable to the order of the attorney of the purchaser and by him indorsed directly to Quinlan. The other two were indorsed in blank, and Quinlan testifies that these checks were received and deposited by him, and that the other trustees never received any portion thereof. It does not appear that Develin and Lynch, or either of them, consented to the receipt of these moneys by Quinlan and their deposit to his individual account, or that they had knowledge of it at the time; and it is not hinted that they were in possession of any facts which should have excited their suspicions, touching either the integrity or responsibility of Quinlan.

These facts bring this case, so far as this item is concerned, within the rule asserted in Wilmerding v. McKesson, 103 N. Y., 329 ; 3 St. Rep., 108, and Bruen v. Gillet, 115 N. Y., 20; 23 St. Rep., 780. In the latter case the court said: “ We have lately held that one executor (and I think the rule is the same with other trustees) is responsible for his own acts, and not for those of his associate; and, if the latter collect and misapply the money, the executor who has not received it is not liable for the waste. H he is merely passive, and simply does not obstruct the collection by his associate, he is not liable for the latter’s waste, if guilty of no negligence himself.”

In Wilmerding’s case the same general rule was laid down. • J udge Miller, speaking for the court, said : Where the funds of the estate were lawfully received by one of the executors, or were originally in liis hands, or properly paid to him in the due course of administration, and there is nothing to excite suspicion as to the integrity or responsibility of such trustee, or to create a belief that the funds have been improperly used or invested, in violation of the established rule, there is no rule which charges the executor or trustee, who has not control of the fund, with the wrongful acts or misconduct of his associate.”

It follows that the sum paid to Quinlan individually, with the interest thereon, which amounted to $3,143.89, should not have been included in the judgment.

The further point is made that Develin and Lynch are not chargeable with certain rents, amounting to over $18,000. Shortly after the trustees had entered upon the execution of the trust, a meeting of all the trustees was held, at which one Walsh was unanimously chosen as their agent to collect the rents and take charge of the real estate until it should be sold. This selection was suggested by Mr. Develin, who subsequently informed Walsh of the action of the trustees. Thereafter Walsh acted as their agent, and turned over the net rents to Quinlan. These facts support the conclusion of the referee that all of the trustees are chargeable with having had joint possession of the rents while they were in Walsh’s hands, and that his subsequent payment must be deemed to have been done by their direction.

The judgment should be reversed, anda new trial granted, with costs to the appellant to abide the event, unless the plaintiff, within twenty 0 days, stipulate to deduct from the judgment the sum of $20,183.98, in which event the judgment must be modified accordingly, and, as so modified, affirmed, with costs of this appeal to the appellant.

O’Brien and Follett, JJ., concur.


author: Follett, J.

text:
    Winston Jones, Assignee, App’lt, v. The Merchants’ National Bank of the City of New York et al., Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed October 13, 1893.)

    1. Banks—Lien on collaterals.
    Where the issue was whether certain bonds deposited with defendant bank to the credit of plaintiff bank were subject to a lien for all of plaintiff’s debts to defendant, or only for those on which plaintiff was primarily liable, plaintiff’s president testified that there was an agreement between the parties whereby plaintiff could overdraw and get discounts from defendant against the bonds as collateral; it otherwise appeared that an open, mutual account had been kept between the parties, as was usual between corresponding banks; that plaintiff had directed the defendant to “take said bonds and hold them to our account; ” that the bonds were under defendant’s control, and that defendant charged back to plaintiff any paper which had not been paid after having been credited. Held, that a verdict that defendant had a lien on the bonds for commercial paper indorsed by plaintiff, and rediscounted by defendant, and not paid at maturity, should be sustained.
    3. Pleading—Misjoinder op causes op action—Waiver.
    Where a case is tried on a stipulated issue, a verdict rendered and judgment entered in accordance therewith, objections to the misjoinder of causes of action are waived when not made before the verdict.

      Appeals from a judgment and an order denying a motion that the j udgment be opened, vacated and set aside for irregularity, and that the judgment be settled and re-entered with the provisions required by the Code of Civil Procedure.
    The record contains eight appeals: (1) By the plaintiff and the Bank of Mobile from the j udgment entered on a verdict; (2) by the plaintiff and the Bank of Mobile from an order denying their motion that the judgment be vacated and set aside; (3) by the plaintiff from an order granting the Merchants’ Rational Bank an additional allowance of five per cent on the verdict; (4) by the plaintiff from an order denying his motion for a new trial, made on the minutes; (5) by the plaintiff from an order denying his motion for a new trial, made on a case containing exceptions; (6) by the plaintiff from an order denying his motion for a settlement by the court of the verdict; (7) by the plaintiff from an order denying his motion for a certificate that the substantial cause of action was the same on each issue; (8) by the plaintiff from an order denying his motion for a review of the clerk’s taxation of costs.
    This action was brought by the assignee for the benefit of creditors of the Bank of Mobile, who sets out in his complaint two causes of action against the Merchants’ Rational Bank of the city of Rew York: (1) In replevin, to recover thirty mortgage bonds issued by the Mobile & Ohio Railroad Company, twenty-five for $1,000 each, four for $100 each, and one for $500 ; (2) to recover $6,181.48 standing to the credit of the Bank of Mobile in an open account between the banks. The Merchants’ Rational Bank admits that it holds the bonds, and that it has on deposit to the credit of the Mobile Bank $6,181.48, but alleges that May 15, 1884, Robinson & McMillan made their promissory note, whereby, for value received, they promised to pay to the order of Danner & Co., five months after date, $8,800, at the Bank of Mobile; that before the note fell due it was, for value received, indorsed and transferred by the Bank of Mobile to the defendant; and that at the maturity thereof it was duly presented for payment, and payment demanded, which was refused, and due notice of presentment, demand and nonpayment was given to the Bank of Mobile. It also alleges that by the custom of banks and bankers, and by virtue of an agreement between it and the Bank of Mobile, it has a lien on the sum so standing to the credit of the Bank of Mobile, and also on the bonds in its hands, as security for said indebtedness on said note. The plaintiff replied, denying that the Merchants’ Rational Bank had, by custom or by contract, a lien on the bonds, or on the sum standing to the credit of his assignor, but did not deny that his assignor was indebted to the Merchants’ Rational Bank as alleged in its answer. The Bank of Mobile appeared in the action, but made default, neither answering nor demurring.
    It was proved on the trial, and it was not controverted, that the Bank of Mobile was indebted to the Merchants' Rational Bank as alleged in its answer, and that the amount of the indebtedness, principal and interest, when the verdict was rendered, Rovember 13, 1891, was $13,744.93, which was found by the jury to be due from. the Bank of Mobile to the Merchants’ National Bank. After the verdict was rendered, and on the same day, the plaintiff moved for a new trial on the minutes, which was denied, and he also moved that the verdict be settled by the court in a form proposed, which was also denied. The Merchants’ National Bank then moved for an additional allowance of five per cent on the verdict, which was granted. Afterwards the plaintiff moved under § 3234 of the Code of Civil Procedure for a certificate u that the substantial cause of action was the same upon each issue,” which was denied. Costs were taxed by the clerk in favor of the Merchants’ National Bank, and thereafter the plaintiff moved that the taxation be set aside and costs taxed in his favor, which was denied. December 1, 1891, a judgment was entered on the verdict, adjudging that the Merchants’ National Bank recover of the plaintiff, as assignee, $1,218.36 costs, $687.25 of which was the additional allowance granted by the court, and that said bank had a lien on the bonds and money, and was entitled to retain both until its claim of $13,744.93, with interest, should be paid. The plaintiff and the Bank of Mobile then moved to set aside the judgment, as entered, and that one in a form proposed be entered, with costs in favor of the plaintiff, which was denied. Afterwards a case was made and settled, and the plaintiff moved for a new trial thereon, which was denied.

      Cary & Whitridge (Burton N. Harrison, of counsel), for app’lt Jones; John B. Whiting, for app’lt Bank of Mobile; Burrill, Zabriskie & Burrill (George Zabriskie and John E. Burrill, of counsel), for resp’t.
   Follett, J.

The question of fact litigated before the jiity, and on the determination of which the decision of this case turns, is, was there an agreement between the banks, by which the Bank of Mobile gave the Merchants’ National Bank a lien on such bonds, stocks, notes and bills as it might have in its possession, belonging to the Bank of Mobile, as security for all liabilities which the last-mentioned bank should incur to the Merchants’ National Bank ? Neither party asked that the case should be withdrawn from the jury and be decided by the court, both thus conceding that there was a question of fact for the jury. But whether the verdict is contrary to the weight of evidence is raised for consideration by this court by the appeals from the orders denying motions for a new trial. From the close of the war of the rebellion to July 8, 1884, the Merchants’ National Bank had been the New York correspondent of the Mobile Bank, during which time there was an open mutual account between those banks, kept according to the custom of corresponding banks. The Bank of Mobile was accustomed to draw sight drafts or bills on the Merchants’ National Bank, and sent it bills and notes payable in northern cities for collection and credit. Frequently the New York Bank rediscounted notes and commercial paper for the Bank of Mobile, and it appears by the uncontradicted evidence that the universal practice was, in ease commercial paper, the avails of which had been credited, was not paid, to charge it back to the account of the Bank of Mobile. Occasionally the account of the Bank of Mobile was overdrawn for considerable sums. During the entire existence of this account the New York Bank had in its possession various bonds, securities and bills belonging to the Mobile Bank, which were not kept in a ' box under the control of the last-mentioned bank, but were under the control of the New York Bank, the officers of which had access to them at all times. In other words, the securities were not held by the Merchants’ National Bank merely for safe-keeping. In 1870 the New York Bank had in its possession bonds issued by the state of Alabama, which belonged to the Bank of Mobile. Mr. Yermilye, the president of the Merchants’National Bank, testified in respect to the terms under which those bonds were held as follows:

“ Q. About the terms on which you held those Alabama bonds, or whatever bonds you held at that time; were they held upon any agreed terms between your bank and the Mobile Bank, and, if so, what were those terms? A. The agreement and understanding between the Bank of Mobile and the Merchants’ Bank was: In case of any overdraft, or any credit which was made to them which turned out not to be paid, it was charged back to the account, so far as that went; and if we paid their drafts before they got credit on the bills which they sent on, or any security which we had in hand, we charged them interest on that until the credit came in from the collection.”

March 29, 1879, William H. Pratt, then president of the Mobile Bank, wrote the president of the Merchants’ National Bank in respect to an overdraft, and, among other things, said: “I have con- " sidered you fully and amply covered by the lien I gave you on our deposit of Alabama bonds with Williams, Deacon & Co., of London.”

March 1, 1879, Mr. Pratt again wrote the president of the Merchants’ National Bank, referring to certain bonds, and, among other things, said: “We may wish to draw on your'bank beyond ■ our remittances, not, however, to exceed, say $30,000 or a value of forty cents on the bonds held by you.”

This evidence is not very important, except that it shows that the securities held by the Merchants’ National Bank were used by the Bank of Mobile as a means of credit.

The bonds involved in this suit were paid for by the Merchants’ National Bank about June 28, 1880, and delivered to it, the sum paid being charged to the account of the Mobile Bank. The letter of the latter bank to the former, directing the payment for these bonds, states,, “ You will take said bonds, and hold them for our account.” The important question is whether the Merchants’ National Bank had the right to hold these bonds as security for any liability which the Mobile Bank might incur. We will first consider the evidence offered in behalf of the plaintiff on this issue.

Albert C. Danner, the president of the Bank of Mobile in 1884, testified, in answer to the third interrogatory: “Early in June) 1884, I went on to New York, and called at the Merchants’ Na. tional Bank, and asked to see the bonds. Mr. Banta, the cashier showed them to me, and they corresponded with the memoranda I had. I left them there with the positive agreement that the Bank of Mobile could overdraw its account, or get discounts from the Merchants’ National Bank, against those bonds, as collateral, to the amount of $20,000. I think that was the amount. My recollection is that Mr. Banta gave me, or sent to the Bank of Mobile, a receipt for these bonds.” “Eighth Interrogatory. Please state in detail the circumstances under which a certain note of Bobinson & McMillan, for $8,800, more particularly described in the answer of the Merchants’ Bank herein, was sent to said Merchants’ Bank for discount. Please produce, and annex to your deposition, any letter or writing, or copies of the same, which may have been addressed to said Merchants’ Bank by the Bank of Mobile, or its officers, at the time said note was forwarded for discount. Answer. I have stated, in answer to the third interrogatory, that I had arranged, as president of the Bank of Mobile, to procure money from the Merchants’ National Bank against certain bonds. In addition to this, I also arranged to rediscount paper that the Bank of Mobile might send ■on for that purpose, up to thirty-five or forty thousand dollars; it being understood between Mr. Banta, the cashier of the Merchants’ National Bank, and myself, that the Bank of Mobile could borrow from the Merchants’ National Bank, and check for same as •required, up to fifty-five or sixty thousand dollars. I will say right here that while I was in New York, arranging this matter, perhaps for three days, I was in the Merchants’ National Bank every day. I was informed that Mr. Yermilye, the president, was sick, but before I left New York I met him at the bank, and ■understood from him and Mr. Banta that he approved the arrangement made. * * * With the cashier of the Bank of Mobile, I went over the bills receivable in the possession of the Bank of Mobile. The piece of Bobinson & McMillan paper, referred to, I remember selecting. It was sent on because it was a good, large amount, and believed to be good, .and, therefore, thought to be a suitable piece for rediscount in New York. I have no copy of the letter in which said paper was sent on, but I directed such a letter to be written by the cashier of the Bank of Mobile, and a press copy of said letter is attached to the deposition of Mr. Winston Jones in this case, and is here referred to as a part of this answer. It is Exhibit 19.” “ Tenth Interrogatory. Please state, if you know, whether, after the said note of Bobinson & McMillan had been discounted by the Merchants’ National Bank, said Merchants’ Bank agreed to advance to the Bank of Mobile any money on the faith of the Mobile & Ohio bonds, to recover which this suit is brought. A. The Merchants’ National Bank had agreed to loan the • Bank of Mobile money on the faith of these bonds, as I have stated before. This money had not been borrowed by the Bank of Mobile.”

Bichard F. Manly, the cashier of the Bank of Mobile from January, 1875, to the date of its failure, testified in behalf of the plaintiff:

“Sixth. Interrogatory. Did the Bank of .Mobile, at any time while you where connected with it, expressly or in any manner pledge • the bonds described in Exhibit B to the Merchants’ ¡National Bank to secure any advances, or for any other purpose whatsoever ? Answer. I recall no instance where the Bank of Mobile, at any time while I was connected with it, expressly or in any manner pledged the bonds mentioned in said Exhibit 18 to the deposition of Winston Jones to the Merchants’ National Bank to secure advances, or for any other purpose, except one instance, which is shown and contained in Exhibit 21 to the deposition of Winston Jones in this case, and except that it was generally understood between both banks that the bonds should operate as a security to the Merchants’ National Bank for any debt for' which the Bank of Mobile should be primarily liable to it.”
“ Eighth Interrogatory. Did there at any time exist any understanding or agreement whatsoever between the Bank of Mobile and the Merchants’ Bank, whereby either bank had any lien upon or interest in the property or moneys of the other in its possession, except in cases where such property or moneys were expressly pledged by the owner? A. There was never any formal agreement between the two banks, whereby either bank had a lien upon or interest in the property or moneys of the other in its possession, except in cases where the money or property was expressly pledged by the owner; but we sometimes drew on the Merchants’ Bank when we did not have funds in its hands, knowing that it held convertible securities of ours, and they paid such drafts, aud we supposed that they did this on the faith of having such securities.”

The foregoing is the principal evidence given by the plaintiff in respect to the purposes for which the defendant held the bonds in question.

Jacob D. Vermilye, who had been cashier or president of the Merchants’ National Bank since 1858, testified, in behalf of the defendant as follows, in respect to a conversation had with Mr. Pratt, the former president of the Bank of Mobile : “ Q. Did you have conversations with him, either in the same or other interviews, about the securities or bonds or whatever else there was in the hands of the Merchants’ Bank belonging to the Mobile Bank? A. Allusion was made to that by him and by me. Q. What was said, in substance? A. The substance of it was that, while the account did not seem to me to be satisfactory, we always had something behind to cover what we might overpay on account, apparently overpay. Q. Do you remember what it was? A. Sterling exchange, drafts; and if we had bonds at that time, which I think we had, of course it covered that. Q. Was there anything said for what indebtedness of the Mobile Bank you should look to these securities ? A. I cannot answer that question, as you have put it. I can only say it was a general understanding. The security that we had was to cover any obligation that they might owe.”

Mr. Vermilye and Mr. Cornelius V. Banta, the cashier of the Merchants’ National Bank since 1872, both testified that there was no understanding between the officers of the bank, limiting the lien of the Merchants’ National Bank upon the securities held by it to debts for which the Bank of Mobile was primarily liable.

These are the leading features of the evidence on both sides respecting the existence of the lien, and we think there was sufficient to raise a question of fact for the jury, and that it cannot be said that their determination is contrary to the weight. of evidence. We have not overlooked the letters written by the president of the Bank of Mobile in August, 1883, and June, 1884, and the telegram of July 8, 1884. By an examination of the evidence of the officers of the Bank of Mobile, it will be seen that they conceded that a lien was given on these securities for such debts as their bank was primarily liable for to the Merchants’ National Bank. The evidence and the course of dealing between the two banks warranted the verdict which was rendered.

It is urged in this court by the learned counsel for the appellant that the evidence was insufficient to justify the jury in' finding that there was a lien upon the balance of the account due from the respondent to the appellant. No such question was presented to the trial court. The court was not asked to instruct the jury to find whether a lien existed upon the bonds, and also' whether one existed upon the account. The practice arising out of the controversy has been somewhat peculiar. In May, 1885, the Merchants’ National Bank brought an action against ‘Winston Jones, as assignee, to recover the amount of the note, in which an attachment was issued. May 15, 1885, a stipulation was entered into between the attorneys of the respective parties by which it was agreed that Jones should forthwith commence an action against the Merchants’. National Bank and the Bank of Mobile for the "purpose of determining the rights of the parties in the bonds, and in the balance due on the account. Pursuant to this stipulation, this action was begun June 9, 1885.

Two causes of action are set out in the complaint—one in replevin, arising out of an alleged wrongful conversion of the thirty bonds, and the other, assumpsit, for the recovery of a money judgment for the amount due on the account The causes of action require, under the Code, different and inconsistent judgments and executions—the first, for á specific recovery of the chattels, and for damages in case they cannot be recovered; and the second, for an ordinary money judgment and execution. No objection was raised by the defendant to this misjoinder, probably because of the stipulation entered into between them, and on the theory that the sole question to be tried was whether there was a lien or not. The successful party on this issue was entitled to costs. The action having been brought and tried upon the theory that whether there was a lien or not was the issue, without objection by either party until after the verdict, it is too late for the defeated party now to raise the question of irregularity. On this verdict a judgment has been entered, declaring the existence and the amount of the defendant’s lien. When this judgment is paid, the plaintiff will be entitled to receive the property in the hands of the respondent, or, if the balance due it on account and sufficient of the avails of the bonds be applied in payment of the judgment, the plaintiff will be entitled to the remainder.

The plaintiff now insists that he was entitled to a judgment declaring him to be the general owner of the bonds and funds. His general ownership has never been denied, but has been admitted from the outset, and is now admitted; the defendant simply claiming a lien on the bonds and account, the amount of which is fixed by the judgment. It is too late for the plaintiff, after having initiated this irregular procedure, to seek to set aside the judgment because of the irregularity, tinder the complaint in this action', •it was impossible to enter a judgment in strict accordance with the •Code, but the one which has been entered sufficiently declares and protects the rights of the litigants and carries out their stipulation. None of the exceptions taken to the admission or exclusion of evidence, or to the instructions of the court to the jury, are challenged by the learned counsel for the appellant, and they have not been considered. The judgment-and orders should be affirmed, with costs.

Yan Brunt, P. J., and Barrett, J., concur.


author: O’Brien, J.

text:
    Elizabeth E. Hutchins, Ex’rx, Resp’t, v. Abraham Van Vechten, App’lt.

      (Court of Appeals,

      Filed November 28, 1893.)

    1. Teust—Declaration oe.
    It is not necessary to produce a deed or formal writing intended for the purpose in. order to prove a trust, but letters or informal memoranda signed by the party, and even admissions in a pleading in another action between other parties, if signed by the party with knowledge of its contents, will satisfy the requirements of the statute if they contain enough to show the nature, character and extent of the trust interest.
    8. Same—Proof.
    In an action to declare a trust in certain real property the evidence showed that shortly after defendant purchased the land he executed a power of attorney to one P., authorizing him to sell it, and at the same time wrote him a letter stating that “whatever is realized, you will understand belongs to II. and myself jointly.” A paper was also produced in defendant’s handwriting, giving a description of the property, and stating that the deed says “nothing about our being entitled to six hundred inches;” also letters from defendant to H. and his son in regard to the land, and to a tenant, in which he says: ‘‘Although the title of the whole property is in me, there .is another party who has an interest.” Held, that the letters and unsigned paper were properly admitted in evidence, and that the evidence was sufficient to establish the trust.
    Appeal from judgment of the supreme court, general term, first department, affirming judgment in favor of plaintiff, adjudging that defendant held certain real property and the proceeds thereof, together with the rents, issues and profits arising out of the use and possession of the same, in trust for the joint and equal benefit of himself and plaintiff’s testator.

      Matthew Hale, for app’lt; Augustus S. Hutchins and Charles N. Morgan, for resp’t.
   O’Brien, J.

The judgment in favor of the plaintiff in the courts below adjudges that the defendant, under a deed of conveyance to him by Reuben E. Fenton on the 23d day of December, 1870, of certain lands in the county of Chautauqua, then became, and was, and ever since has been, seized and possessed thereof, and of the proceeds, rents, issues and profits, in trust for Waldo Hutchins, the plaintiff’s testator, to the extent of an equal undivided one-half part thereof as tenants in common. It appearing that the defendant, before the commencement of the action, had sold the land, the title to which he held in his own name, an accounting concerning the proceeds and the rents and profits was directed before a referee designated in the judgment. There is little, if any, dispute with reference to the facts, and practically the only question presented by the appeal is whether the trust impressed by force of the judgment upon the defendant’s title was sufficiently or legally established. The defendant relies upon the provisions of the statute of frauds concerning trusts of this character, and it therefore becomes necessary to determine whether the plaintiff’s proofs are such as that statute requires. The English statute on the subject, 29 Car. II, chap. 3, in its essential features was enacted in this state by the act of February 26, 1787, the twelfth section of which provides that “ all declarations or creations of trusts of any lands shall be manifested and proved by some writing signed by the party entitled by law to declare the trust. ” Thus the law stood for about forty years until the general revision of the statutes, when it was changed and made to read as follows; Ho estate or interest in lands, other than leases for a term not to exceed one year, nor any trust or power over or concerning lands, or in any manner relating thereto, shall hereafter be created, granted, assigned, surrendered or declared, unless by act or operation of law, or by a deed or conveyance in writing, subscribed bjr the party creating, granting, assigning, surrendering or declaring the same, or by his lawful agent thereunto authorized by writing.” 2 R. S., 135, § 6.

After the revision a trust of the character claimed by the plaintiff in this case could not be created or established except by a deed or conveyance in writing. But by chapter 322 of the Laws of 1860 the legislature restored the law to its original condition by an amendment to the seventh section, substantially providing that a declaration of trust in lands might be proved by any writing subscribed by the party declaring the same. It is not necessary now to produce a deed or a formal writing intended for the purpose in order to prove the trust, but letters or informal memoranda signed by the party, and even admissions in a pleading in another action between other parties, if signed by the party with knowledge of its contents, will satisfy the requirements of the statute, if they contain enough to show the nature, character and extent of the trust interest. Forster v. Hale, 3 Vesey Jr., 696 ; Fisher v. Fields, 10 Johns., 494 ; Wright v. Douglass, 7 N. Y., 564; Cook v. Barr, 44 id., 156; Loring v. Palmer, 118 U. S., 321; 2 Story Eq. Jur., § 972 ; McArthur v. Gordon, 126 N. Y., 597; 38 St. Rep., 667; Uram v. Coates, 109 Mass., 581.

The evidence produced in behalf of the plaintiff was sufficient within this rule to establish an interest in the lands by her testator at the time of his death, which occurred on the 9th day of February, 1891. The conveyance to the defendant was shown by the production of the deed, which appeared to have been recorded in the proper clerk’s office December 3,1875. The plaintiff produced and put in evidence three papers found in an evelope in the safe of Mr. Hutchins after his death, and which were shown to have been in his possession during his life. (1) A power of attorney under the hand and seal of the defendant to John H. Platt, who was, at the time of its execution, the law partner of the deceased, hearing date June 5, 1878, acknowledged before a notary public in the city of New York, who also became a subscribing witness thereto. This instrument authorized and conferred full ¡lower upon Platt to sell the land for $8,000, payment to be made in the manner and as specified therein. (2) A letter in the defendant’s handwriting and bearing his signature, of the same date as the power of attorney, addressed to Platt, in which, after referring to the power of attorney and giving instructions permitting him to take certain notes for the purchase price of the land, the defendant says: “ Whatever is realized yon will understand that it belongs to Waldo Hutchins and myself, jointly and equally, and any further instructions Mr. Hutchins may give you you may comply with.” (3) Another paper, unsigned, but wholly in the defendant’s handwriting, describing the land conveyed to him by Fenton. It begins with the statement that the “ deed from Fenton to me is a warranty deed with full covenants.” And after the description ends with the statement that “the above is the description of the property as contained in a deed to me; nothing about our being entitled to 600 inches.”

The plaintiff also produced several letters written by the defendant to the deceased and one of his sons, after the execution of the power of attorney, in regard to taxes on the land. Also a letter written by the defendant to E. H. Fenton, then a tenant of a portion of the land, bearing date February 14, 1887, in which the defendant states that “Although the title of the whole property is in me, there is another party who has an interest. I expect to go to New York sometime next week, when I will see him and let you know what it is decided to do.” It is not necessary to the plaintiff’s case to show that the trust was created by or originated in a writing. The statute enacts a rule of evidence and is satisfied if the trust is manifested or proved by a writing, however it originated, whether by parol arrangement or otherwise. Crane v. Powell, 139 N. Y., 379 ; 54 St. Rep., 659. The defendant’s letter to Platt refers to the power of attorney, and that refers to the deed under which the title was held, giving its date and the parties to it. Both are signed by the defendant, and, reading them together, as they should be, the subject-matter and extent of the trust is sufficiently defined and specified, even without the unsigned paper and other letters. This proof is sufficient to sustain the findings of the learned trial judge, to the effect that the defendant took and held the title to the land in his own name, but in trust for the benefit of himself and the plaintiff’s testator, in equal shares as tenants in common. It was not, of course, one of the express trusts authorized by statute, but one arising under the forty-seventh section, which in equity entitled the deceased to a beneficial interest, and vested in him an estate of the same quality and duration as such interest. Ellwood v. Northrup, 106 N. Y., 172-9 ; 8 St. Rep., 687.

We agree with the learned counsel for the defendant that a trust cannot be impressed upon what appears by the deed alone to be an absolute title in the defendant, without clear proof showing a beneficial interest in another as well as its nature, character and extent, and that a failure to execute or deliver the necessary legal evidence to qualify the title is fatal to such a claim. Wadd v. Hazleton, 137 N. Y., 215 ; 50 St. Rep., 400; VanCott v. Prentice, 104 N. Y., 45 ; 5 St. Rep., 654.

With this point clearly in view we have carefully considered the very able argument of counsel in behalf of the defendant mainly devoted to the proposition that the proof in this case does not come up to the standard which the law demands in such ■cases. But we think that the written evidence produced at the trial is not fairly open to any construction except that given to it by the learned judge, and is consistent only with the theory that the deceased had in fact a beneficial interest in the - lands. The defendant stated under his own signature, when authorizing his ■attorney in fact to sell the property, that he was entitled to onelialf the price, and directed the attorney to consult with him in regard to the execution of the agency. There is nothing in the ■case to warrant the belief that this division of the proceeds of the sales, when made, referred to compensation as a broker or to anything else save an interest in the property to be sold. That is the natural conclusion which the judicial mind must reach upon reading the letters and papers in the light of all the circumstances. The trust, it is true, must be established wholly by a writing ¡sufficient within the statute, but when the writing is produced it must be interpreted, like all other contracts and written instruments, according to the intention of the parties ascertained from the language used and all the surrounding circumstances. The fact that no proof was given by the plaintiff of payment by the testator of any part of the consideration is not material. It is not always possible after the death of the party interested to give such proof, and it is not essential to the process of establishing the trust. A writing without any consideration whatever affords sufficient proof that the title conveyed by the deed is for the benefit of another.

The unsigned paper and the letters of the defendant bearing date subsequent to the power of attorney, and the letter which accompanied it, relating to the taxes on the land and the nature •of the defendant’s interest therein, were properly admitted in evidence. Thejr were all in the defendant’s handwriting, presumptively sent or delivered by him to the deceased, and they explained and tended to confirm what the defendant had stated in the first letter in regard to the interests of the-parties in the land,,,

There are some other exceptions in the record, hut it is not necessary to refer to them in detail. It is sufficient to say that, we have examined them all and have found nothing in them that would warrant us in disturbing the judgment, and it should, therefore, be affirmed, with costs.

All concur, except Peckham, J., not sitting.

       Affirming 49 St. Rep., 491.